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Jpmorgan Algorithm Knows You’Re A Rogue Employee Before You Do

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http://www.bloomberg.com/news/articles/2015-04-08/jpmorgan-algorithm-knows-you-re-a-rogue-employee-before-you-do

Wall Street traders are already threatened by computers that can do their jobs faster and cheaper. Now the humans of finance have something else to worry about: Algorithms that make sure they behave.

JPMorgan Chase & Co., which has racked up more than $36 billion in legal bills since the financial crisis, is rolling out a program to identify rogue employees before they go astray, according to Sally Dewar, head of regulatory affairs for Europe, who’s overseeing the effort. Dozens of inputs, including whether workers skip compliance classes, violate personal trading rules or breach market-risk limits, will be fed into the software.

“It’s very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader,” Dewar, 46, said last month in an interview. “The idea is to refine those data points to help predict patterns of behavior.”

JPMorgan’s surveillance program, which is being tested in the trading business and will spread throughout the global investment-banking and asset-management divisions by 2016, offers a glimpse into Wall Street’s future. An industry reeling from billions of dollars in fines for the actions of employees who rigged markets, cheated clients and aided criminals is turning to technology to police itself better. Failure to do so will provide ammunition for those pushing to separate trading operations from retail banks.

..

Automated surveillance is necessary for Wall Street firms because billions of e-mails flow through each bank annually, overwhelming the ability of people to monitor them, according to Estes. Still, technology that predicts behavior, as in the 2002 science-fiction movie “Minority Report,” in which Tom Cruise plays a Precrime officer who hunts down murder suspects before they can act, raises ethical questions.

“What they’re trying to do is forecast human behavior,” said Mark Williams, a former Federal Reserve bank examiner who’s now a lecturer at Boston University’s Questrom School of Business. “Policing intentions can be a slippery slope. Do people get a scarlet letter for something they have yet to do?”

Excellent we are moving to sack people before they've done anything wrong because a computer algorithm says so?? Still at least they can predict the economy, so these algorithms must work...

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http://www.bloomberg.com/news/articles/2015-04-08/jpmorgan-algorithm-knows-you-re-a-rogue-employee-before-you-do

Excellent we are moving to sack people before they've done anything wrong because a computer algorithm says so?? Still at least they can predict the economy, so these algorithms must work...

The next step will be for the authorities in general to start data mining the huge store of information that they've acquired through spying on the public at large, for people that they define as potential 'troublemakers'.

For your own good, of course, citizen.

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University departments already use anti plagiarism tools to spot cheating students. Not sure they use it on their professors though.

Pattern detection is already used to catch match fixing syndicates, I'm sure that could be modified to pick out LIBOR fixing syndicates.

As for people at the top stopping using email. A lot of them have flunkies to handle email - even my MP did.

A lot of people lower down the food chain seem to have stopped using email. I've been after quotes for all sorts of stuff. The response rate of sales departments is utterly woeful. BT, SSE and many others could monitor whether their sales teams respond to enquiries and fire the lazy parasites that don't. The government wonders why productivity is falling - the answer is there are loads of people out there pretending to work. SSE sales phone line (from their web site) was just ringing out and cutting off when I tried the other day. Our supposed 'account manager' did respond when I used an inside contact to kick him but only to say he would reply to my request 'tomorrow'. Its now a fortnight since that response.

Bring on the computers!

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http://www.bloomberg.com/news/articles/2015-04-08/jpmorgan-algorithm-knows-you-re-a-rogue-employee-before-you-do

Excellent we are moving to sack people before they've done anything wrong because a computer algorithm says so?? Still at least they can predict the economy, so these algorithms must work...

Don't be daft. This is an extension of what's been happening for year - compliance finds a suspect trading patter so goes and investigates. Sometimes it's a real issue, and people will get fired, much of the time it will be a false alarm. A decade ago I worked on some software to spot when we traders might be parking securities before month end with a friendly counterparty and we had at least 100 false alarms before we found a real live case.

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Will it monitor email at all levels - bottom to very top?

Not the top 10% probably. And who monitors the monitors?

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Minority Report.

prt_200x200_1292257458.jpeg

****SPOILER***

There's a super computer (Pre-cog) that monitors Rogue Employees, and it flags them up to the "Officer" (Tom Cruise), and his team. He and a crack team abseil down the office windows, and they smash into their offices and he stops in them in the act of putting on a rogue trade, or stealing the stationary, right before they do it. This is the "pre-crime".

bournemouth_business2.jpg

^Bournemouth JP Morgan

But one day during a jet flight to a office in Bournemouth where another pre-crime is about to take place, the computer flags up the "Officer", who then becomes the hunted! But in a twist he has been framed...and the super computer is flawed.

Edited by 200p

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I can exclusively reveal the code that makes this work

10 PRINT "ARE YOU AN RBS MARKETS J. P. MORGAN EMPLOYEE?"

20 IF ANSWER ="YES" START EJECTION PROCEDURE

30 GOTO 10

Statistically speaking, I've corrected it for you.

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