Fighting market abuse in the age of AI: Five strategic shifts every financial services executive must address

Abstract

Market abuse has entered a new era. What was once episodic, localised and largely detectable is now growing in frequency and magnitude, cross-border and increasingly difficult to detect. Insider trading, spoofing and manipulation no longer necessarily occur within a single asset class, venue or communication channel. They can unfold across markets, platforms and jurisdictions. Technology has accelerated this shift. Algorithmic trading compresses reaction times to milliseconds. Digital assets trade 24/7 across fragmented venues. Social media and encrypted messaging enable rapid coordination outside traditional surveillance perimeters. Meanwhile, regulators are raising expectations, not lowering them, using advanced analytics of their own and imposing record-breaking penalties for failures in supervision, recordkeeping and detection. For senior executives, the implication is clear: market abuse has evolved beyond a traditional compliance issue. It is a strategic risk that tests the resilience of a firm’s governance, data architecture, operating model and culture. As markets accelerate, AI is no longer optional. It has become the foundation of effective surveillance, while simultaneously introducing new governance, explainability and accountability expectations from regulators. This paper explores five structural trends redefining market abuse risk and outlines the decisions leaders must make to adopt AI-driven surveillance in a way that is defensible, scalable and aligned with regulatory expectations. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.