Financial Conduct Authority Improves UK’s Financial Market Monitoring with Near-Real-Time Market Intelligence
 
 

Financial Conduct Authority Improves UK’s Financial Market Monitoring with Near-Real-Time Market Intelligence

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.

 
Smarter Financial Trading Pattern Analysis

A word from Financial Conduct Authority

  • “The capability offered by Oracle Exalytics enables the Financial Conduct Authority to more readily unlock the wealth of information contained in transaction reports. The Oracle solution provides easy and timely access to detailed intelligence, enabling us to more quickly identify potential risks in the market.” – Brian Eyles, Manager, Market Business Intelligence, Financial Conduct Authority

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.

 
Near Real-Time Analysis

 
Multiple Data Sources

 
 

 
 

Challenges

  • Deliver meaningful intelligence by improving analysis of 13 million daily financial transactions collected from UK and European financial institutions
  • Enhance surveillance across Europe by sharing market data with 27 competent authorities across Europe
  • Use aggregation to analyze market behaviors over a period of time and in relation to peer organizations

Solutions

  • Deployed Oracle Business Intelligence Foundation Suite running on Oracle Exalytics to improve market monitoring and analyze financial trading patterns to identify suspect trading and market abuse faster
  • Reduced time to produce detailed, user-friendly financial transaction reports from days or weeks to just seconds
  • Accessed information and intelligence from near-real-time data quickly and easily by creating detailed reports at the touch of a button using Oracle Exalytics and Oracle Business Intelligence Foundation Suite
  • Used broad-trending data and predictive market analysis to enable analysts to be more forward-looking
  • Worked with Oracle presales and Oracle Consulting to deliver a successful implementation in just seven months

Why Oracle

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.

Implementation Process

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

  • Work with technologists to get the intelligence you need from your data, as without the right tools, you can never fully exploit the data you have
  • Use agile development methodologies and take small steps to deliver value early
  • Ensure all relevant departments are involved throughout the process
  • Get buy-in across the organization—FCA delivered 60 presentations internally to show the value of the project and the technology
  • Keep the momentum going by adding more data, and more functionality in iterative steps