Who's Been Naughty or Nice? Compliance Surveillance in 2024

As we count down to the holidays, it's time to reflect on whether your firm's surveillance and monitoring practices are on Santa's "Nice" list, with robust compliance systems, or if you're skating dangerously close to the "Naughty" side. In a regulatory world where oversight is critical, good practices are rewarded with peace of mind, while missteps might leave you scrambling to explain yourself to the regulators.

Here’s a festive rundown of the behaviors that will get you gifts under the tree - and the ones that might land you a lump of coal (or worse, a regulatory fine).

The naughty list

Here are the pitfalls that can lead to headaches, fines, or even regulatory scrutiny. Avoid these if you want to end the year on the right foot:

1. Ignoring behavioral indicators: Failing to monitor unusual employee behavior, such as consistently late trade submissions or access anomalies, can signal deeper issues.

2. Patchy monitoring across channels: Overlooking new or alternative communication platforms, like WhatsApp or Teams, leaves gaps that can be exploited. A robust monitoring system should cover all approved (and unapproved) channels.

3. Delays in investigating alerts: Allowing flagged issues to sit unaddressed for days, or longer, suggests a reactive, rather than proactive, approach to compliance monitoring.

4. Siloed surveillance and monitoring: Disconnected processes between surveillance and monitoring systems leads to missed patterns and inefficiencies. Integration is key.

5. Ignoring the human factor: Not training employees on what is being monitored and why creates friction and risks non-compliance, whether intentional or accidental.

The nice list

If your firm practices these habits, you’ll find yourself firmly in Santa’s good graces - and better prepared to meet regulatory expectations:

1. Unified surveillance and monitoring programs: Integrating monitoring with surveillance to provide a full view of risks ensures your compliance team can spot and act on issues faster.

2. Dynamic monitoring systems: Using technology that adapts to evolving regulations and firm-specific risks shows a commitment to staying ahead. Tools that flag anomalies in real-time and prioritize high-risk activities are particularly effective.

3. Proactive behavioral monitoring: Tracking and analyzing behavioral patterns, such as irregular trading or access to sensitive data, helps detect issues before they escalate.

4. Regularly audited systems: Reviewing the effectiveness of your surveillance and monitoring systems on an ongoing basis demonstrates a commitment to continuous improvement.

5. Staying ahead of hybrid work challenges: With remote and hybrid workforces becoming the norm, ensuring monitoring extends to decentralized environments (e.g., monitoring remote log-ins and communications) is essential.

6. Partnering with experts: Collaborating with firms like ACA to review and enhance your surveillance and monitoring framework helps you adapt to evolving risks and regulatory demands.

Effective compliance isn’t just about surveillance or monitoring - it’s about how these systems work together to create a cohesive approach to identifying and mitigating risks. Surveillance captures what is happening; monitoring analyzes why and what action to take.

Firms that integrate both systems to uncover hidden patterns, such as insider trading risks, behavioral anomalies, or gaps in communication oversight, will always land on the “Nice” list.

This holiday season, take a moment to assess whether your surveillance and monitoring practices have been naughty or nice. Are they helping you reduce risk, protect your firm, and stay compliant? Or are you missing critical opportunities to improve? With the right steps, you can ensure compliance while setting your firm up for success in the year to come.

If you’ve spotted a few “Naughty” behaviors, don’t worry - it’s never too late to clean up your list. Our experts are here to help you start the new year strong. We specialize in helping firms like yours stay ahead of risks with tailored solutions for surveillance, monitoring, and compliance programs.

Let’s make 2025 your best compliance year yet!

How we help

Whether launching, growing, or protecting your business, we can integrate these building blocks into your surveillance and monitoring programs to simplify compliance, reduce regulatory risks, and adapt to evolving global demands by offering:

• Integrated technology solutions: Strengthen surveillance and monitoring with advanced RegTech tools like AI-powered analytics, automated alerts, real-time monitoring, and enterprise-wide case management.
• Expert-led managed services: Gain tailored insights, continuous monitoring, and compliance support to stay ahead of regulatory changes while reducing operational burdens.

Ready to embrace a holistic approach to surveillance and monitoring? Contact us today to learn how our blend of people, processes, and technology can help your firm increase efficiencies and meet regulatory obligations.

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