The five biggest frustrations firms experience with their trade surveillance system

Across the financial services industry, firms have invested heavily in regulatory technology to keep pace with expanding obligations and market complexity. Yet despite this investment, many compliance teams remain frustrated by their trade surveillance systems and issues that make the day-to-day detection of market abuse more difficult than it should be.  

Over the last year, eflow’s team has spoken to more than 1,400 regulatory professionals from around the world regarding their current trade surveillance technology. These conversations cover a wide range of user cases; from recently onboarded firms to long-standing clients that have worked with the same vendor for multiple years.  

We’ve used cutting-edge AI technology to analyse these conversations and draw out the main pain points that frustrate regulatory professionals the most.  

1. Alert overload: When noise drowns out risk

One of the most persistent challenges cited by the firms we have spoken to is the sheer volume of false positives that their surveillance system generates.  In many cases, regulatory professionals stated that static alert thresholds, rules-based logic that is too rigid, and limited use of wider market context were the main drivers of excessive false positive alerts.

As a result, compliance teams are flooded with alerts that lack substance but still need to be reviewed. This means that analysts spend excessive time triaging low-value alerts, genuine market abuse risks become harder to detect, and teams suffer from “alert fatigue,” reducing their overall effectiveness.  

The eflow solution:

• Highly configurable alert parameters that can be tailored to a firm’s risk strategy

• Dedicated Sandbox environment for alert testing and refinement

2. Limited configurability = Lack of control

Many firms report that their trade surveillance systems are difficult to tailor to their specific trading profiles, clients, or asset classes. Some of the most common issues reported include the inability to set granular parameters by client, strategy, or instrument, a dependence on technology vendors to make even minor rule changes, and rigid frameworks that don’t adapt to market volatility.  

This means that compliance teams are often left frustrated by the lack of flexibility available to them and the amount of time they need to invest in order to tailor their system.  

The eflow solution:

• A simple UX that enables users with appropriate permissions to edit system configurations

• Set and customise conditional parameter values based on reference and market data metrics such as volatility and instrument liquidity 

3. No safe environment to test changes

Regulatory explainability is a phrase that has gained significant momentum in the last 12 months. Global regulators now expect firms to ‘show their workings’ when it comes to how their trade surveillance has been configured and why such decisions were made.

To achieve this, a testing environment – or Sandbox – is now a vital tool for firms. Without one, alert parameters can only be changed in live environment which leaves compliance teams at risk of unexpected spikes in alert volumes and change management becoming a slow and risky process.  

The eflow solution:

• A dedicated Sandbox environment in which clients can test, validate and promote system changes safely and securely

• Sandbox testing takes place on an exact replica of your system to highlight the real-life impact and demonstrate the rationale behind decisions to the regulator

4. Poor user experience and support

A major pain point, particularly for clients of legacy trade surveillance systems, was a lack of meaningful product updates. Firms reported that the lack of a visible product roadmap and sporadic releases meant that functionality that they were expecting to have access to never materialised, creating the need for manual workarounds and inefficient processes.

To compound this, firms complained of very poor ongoing support with slow response times, outsourced help centres that didn’t understand client challenges, and issues going unresolved for several months.

The eflow solution:

• An agile product development strategy with multiple releases of product enhancements every quarter

• eflow’s 24/5 helpdesk is managed in-house by product and technical specialists – no outsourced call centres or chat bots for our clients

5. Poor onboarding, inefficient implementations and long time-to-value

We understand that implementing a new trade surveillance system into a business isn’t a straightforward process. However, many of the firms we spoke to complained of onboarding processes that took significantly longer than anticipated (well in excess of 12 months was a common occurrence). This caused frustration amongst teams and soured vendor relations from day one.

In addition, delayed onboarding meant that firms saw much slower return on their investment and often meant they had to rely on existing systems for extended periods of time, sometimes incurring additional costs for doing so.

The eflow solution:

• A dedicated onboarding specialist is allocated to you as soon as you become a client and they manage your onboarding from start to finish

• We aim to have your system fully operational within 90 days of the project starting and we automate large parts of the process to minimise the ‘dead time’ that can cause delays

What does this mean for firms assessing trade surveillance vendors?

Making the commitment to move from one trade surveillance system to another is a big decision for any firm. Compliance teams need to ensure that they are selecting technology that will offer them the robust surveillance that they need, whilst also offering the flexibility and configurability that today’s rapidly evolving landscape demands.

Key questions to ask of any vendor include:

1. How configurable is the system and what power does the end user have to make changes without vendor support?

2. Is there a Sandbox or testing environment in which we refine our system setup before making changes to a live system?

3. Is your support outsourced or in-house and what SLAs do you offer to clients in need of urgent support?

If your firm is assessing its options for trade surveillance software, our team is here to help. You can explore our solutions here, or book a demo at your convenience.