A Precise Understanding of Trade Surveillance with Big Data

A Precise Understanding of Trade Surveillance with Big Data

Being a buzzword, Big data have grabbed the attention of many industries and this technological hype has become crucial in many industries, especially in the financial sector. Today, financial markets are going through drastic changes. With the growth of high-end and real-time trading, compliance teams are working hard when it comes to both structured and unstructured data. Latest techniques and new tools are not just improving trade surveillance, but also finding irregularities and abuse before they can cause any sort of harm.

What is Big Data?

Big data is a phrase that illustrates the collection and storage of large volume of data that can be structured and unstructured. However, the amount of data collected and stored is not as important as collecting the data that matters. The analytics on Big Data involve gathering, classifying and scrutinizing large volume of data in order to obtain right and useful information that can help in making right business decisions.

Importance of Big Data

Big data development services plays a crucial role in many industries. Its importance is not based on how much data you’ve collected, but it is based on what you are going to do with it. However, you are free to acquire data from any source and then analyze it to find relevant answers. Big data are generally scrutinized for insights that help in making better strategic business moves and decisions.

Challenges Faced by Trading Firms

Today, regulatory compliance teams are facing challenges due to the growth of algorithmic trading where final decisions are made by the computers and both structured and unstructured data are scanned. However, surveillance methods are very effective for click trading. In today’s modern world, approx 50% of high-frequency trading accounts are calculated by volume of the data received by an organization.

Analytics on Big Data

  • Maintaining And Recalling Uninterrupted Life Cycles
    It is important for trading firms to recall and maintain the uninterrupted life cycles of any individual trader. This act can be very helpful for internal compliance teams to perform the best analysis and find the main issue that can occur. Also, it facilitates the firm to reply precisely to regulatory questioning when the need occurs.
  • Cross-Asset And Cross-Market Surveillance
    At any larger firm, traders can access to different trading locations and can see liquidity throughout the market. They are free to access and order book different asset, locations as well as classes, such as dark pools of liquidity, ECNs and exchanges. The tools with compliance officers are used for discovering market abuse and these tools can scan the executions of the traders. Besides, compliance teams can’t compare the bid that is placed on an ECN and they can’t identify spoofing if in case trader is trading on diverse locations in diverse time zones.
  • Market Manipulation Techniques
    As a responsibility of the market surveillance team, it is crucial that they make sure that participants in the market are receiving a right play. Perhaps, there are different market manipulation techniques opted by the regulators and these are- Momentum Ignition, Layering/spoofing and Quote is stuffing.

Overcoming the Hurdles through Industry and Regulatory Means

The growth of data in a few last years is taxing the IT infrastructure of a number of financial market firms. Luckily, there are some latest technologies that can assist these firms to leverage and manage the big data pools. With the big data build-up architecture, the IT companies can maintain both structured as well as unstructured data in the identical repository.

Big Data analytics entail gathering, classifying and scrutinizing large volume of data to get precise information that can help in making sound business decisions. For financial and capital market companies, big data can easily reach diverse petabytes. However, relational database techniques have established for processing a huge volume of data and can’t apply to huge data sets.


Equipping regulatory compliance teams with technologies and tools is very important to speed up with computerized traders. This is because they have to manage the data that is coming to them from various formats, locations and media. Big global banks in the U.S. are also using Big data and by implementing it along with CEP, they can easily gather data from different sources in real-time. By acquiring data streams and new tools, the surveillance teams can uncover more complicated matters of abuse and hence, get to the particular alerts that can only mark insider trading.

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