Market Surveillance for Sell Side and Buy Side: Driving Strategic Insights

by Ranjana Pieris,  Anshuman Jaswal, PhD, May 21, 2015
Product Trends/ Reviews


This report looks at the features of modern surveillance systems and the drivers for their use among buy side and sell side firms.

Market surveillance is not an easy job, and the boundaries of what the surveillance systems are expected to include are being pushed further outwards on a regular basis. The continuing market fragmentation is leading to a growing volume of data from trading venues, communication methods, and regulatory requirements. The surveillance professional is overwhelmed just trying to keep up. However, this is not a burden that they carry alone; the vendors of surveillance systems have been working to solve their requirements. 

It can be worrying to think about the plethora of technologies that are now involved in market surveillance. However, we should remember that trade surveillance at its basic level simply involves monitoring the demand and supply of an asset class, and being able to account for the underlying motivations and reasons for the actions of the market participants. Similarly, in spite of all the technology in place, the human element remains central for decision-making. Hence, the technology is only the means and not an end in itself.

“The future of surveillance will be changing because there is growing relevance for technology such as machine learning to improve the predictive power of the system and reduce the number of false positives that the system generates,” says Dr. Anshuman Jaswal, a senior analyst with Celent’s Securities and Investments practice and coauthor of the report. “This will not only mean that firms adopt these technologies, but will also result in changes within the cultural DNA of the firms.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary



Key Research Questions





Key Research Questions


Modern Surveillance Systems



Seeing Is Believing



Important to Weave Patterns



Legion of Upgrades





Humans Still Decide



The Sell Side Still Dominates Surveillance


Prospects for Machine-Driven Surveillance



The Thought Police Are Here



Do Robots Count Electronic Losses?



We Are in the Age of Consolidation




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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