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Data as sword and shield: How regulated entities in the banking and securities industries can utilise data analytics to improve compliance and manage enforcement risk
Journal of Financial Compliance,
5
(4),
324-334
(2022)
Abstract
This article examines the role of Big Data in the regulation of the consumer finance and securities industries in the United States. Because many major international financial institutions are located in New York, this paper discusses the role of both federal and New York state regulators. These regulators increasingly rely on data to conduct risk analyses and shape examination priorities, which, in turn, can lead to investigations and enforcement actions (that are also increasingly driven by data analysis). This article also discusses regulators' expectations regarding the role of data analytics in the development of effective compliance programmes and how regulated entities can leverage data to proactively address issues before they become subject to regulatory scrutiny, and use this information during the course of examinations, investigations and enforcement actions.
Keywords: Data analytics; banking regulation; securities regulation; enforcement
The full article is available to subscribers to the journal.
Author's Biography
Brian H. Montgomery is Senior Counsel in Pillsbury's Financial Industry Group, where he advises financial institutions regarding a broad range of regulatory compliance issues. Prior to joining Pillsbury, Brian served in several senior positions in the New York State Department of Financial Services, where he led the department's programme to examine regulated institutions for compliance with federal and state consumer financial laws. As Deputy Superintendent, Brian oversaw consumer compliance and fair lending examinations of banks, non-depository lenders, loan servicers, credit reporting agencies and other regulated institutions, as well as Community Reinvestment Act examinations.
David Oliwenstein is Counsel in Pillsbury's Corporate Investigations & White Collar Defense Group. Prior to joining Pillsbury, David served for five years in the SEC's Enforcement Division, where he worked closely with the agency's data experts in the Analysis and Detection Center, Division of Examinations, and the Division of Economic Research and Analysis. During his tenure at the SEC, including as a senior counsel in the Market Abuse Unit, David conducted all aspects of investigations regarding potential violations of the federal securities laws, including insider trading, cyber matters, accounting misconduct, market manipulation, algorithmic trading cases, disclosure issues, broker–dealer violations and offering frauds.
