Financial Conduct Authority (FCA) has rule-making, investigative, and enforcement powers to regulate and protect the financial services industry in the UK. It aims to secure an appropriate degree of protection for consumers; protect and enhance the integrity of the UK financial system; and promote effective competition in the interests of consumers.
FCA collects 13 million daily transaction reports from regulated financial institutions across the UK and Europe and exchanges 8 million daily reports with 27 other regulators across Europe. The FCA uses this information primarily to identify prospective cases of market abuse by financial institutions or individuals. When employed at an aggregate basis, the reports are also an important source for the identification of leading indicators in the market.
FCA previously used traditional business intelligence systems that were suboptimal—limiting the organization’s market analysis capabilities. The organization wanted to extract further information and intelligence from its substantial data set and required a solution that would provide that intelligence in a flexible and configurable way.
After considering alternative solutions, the FCA implemented Oracle Exalytics In-Memory Machine to provide fast, timely access to detailed intelligence drawn from an aggregated data set. The organization can now complete analyses in seconds, enabling it to quickly spot unusual trading.
With Oracle Business Intelligence Foundation Suite running on Oracle Exalytics, FCA can carry out much more detailed analysis, looking at financial trading patterns within individual organizations or against their respective peers. This enables analysts to drill down into the data and examine each organization’s unique trading patterns and strategies more readily.
“By using predictive and broader trending analysis, our statisticians and mathematicians can be more forward looking. The Oracle Exalytics tool empowers us to ask pertinent questions where we see a change in behavior and a deviation from the trend, and it provides us with answers we did not have before,” said Brian Eyles, manager, market business intelligence, Financial Conduct Authority.
Oracle Exalytics makes FCA analysts’ job much easier. With greatly improved, user-friendly reports, quantitative analysts can now identify suspect trading patterns much faster.
“Beforehand, it would have taken an inordinate amount of time to complete a transaction count to measure the number of trades by asset class across the entire market. Now, we can complete this process and distribute reports in less than five minutes,” said Martin Taylor, team leader, market business intelligence, Financial Conduct Authority.
The FCA collects data from UK and European financial institutions and feeds it into FCA’s data warehouse, which runs on Oracle Database. From there, Oracle Data Integrator funnels the information into a staging platform, where Oracle Essbase aggregates the data. Oracle Data Integrator then passes the aggregated information into Oracle TimesTen In-Memory Database on Oracle Exalytics from where analysts perform relevant queries using Oracle Business Intelligence Enterprise Edition.
In addition, FCA collects reference data from a number of external sources such as the London Stock Exchange, Thomson Reuters, and SWIFT. This information underpins the validation of transaction data provided by the financial institutions, helping FCA to gain a clearer picture of market trading.
FCA initially considered building its business intelligence platform in-house but after Oracle introduced Oracle Exalytics, the organization decided to deploy that, since it delivers extreme processing power while also being cost-effective and easy to use. Users do not have to understand the technology or be an expert in macros or pivot tables to use Oracle Exalytics.
“Oracle Exalytics offered us everything we were looking for in an inexpensive supercomputer,” Taylor said.
“Oracle presales and Oracle Consulting spent a lot of time with us to ensure both the proof of concept and the pilot were successful,” Taylor continued.
“We worked very much in partnership with Oracle Consulting and Oracle presales to develop our capability with Oracle Exalytics. Oracle helped us to articulate our business requirements and to support the collective development as a whole,” Eyles said.
FCA worked with Oracle to complete a six-week proof of concept (POC) to show how Oracle Exalytics could carry out analyses such as peer reviews which can identify anomalies between a bank and its peers. The POC showed that Oracle Exalytics could quickly highlight market abuse through early indicators and also provided detailed market analysis on a near-real-time basis.
Following the successful POC, FCA worked with Oracle Consulting to undertake a detailed multistage pilot and built the staging platform. FCA used an agile methodology throughout the project to successfully complete the implementation in just seven months. The project team worked with a number of departments to define a base-report set and created 10 core dashboard reports that users can customize to individual requirements.
FCA put twelve months’ data into Oracle Exalytics, amounting to approximately 2.7 billion transactions. It used Oracle TimesTen In-Memory Database to hold the last three months’ transactions and provide high-speed access to the most relevant and interesting data. The system has been very well received by users and is very stable with the organization now handling 2 to 3 billion records every year.
Advice from Financial Conduct Authority