Bank workers鈥� e-mails, phone calls and internet chat conversations are increasingly being scrutinised by computers, as firms aim to prevent rogue traders or aggressive rumours that distort stock prices.
Rogue trader J茅r么me Kerviel was recently blamed for a 4.9-billion euro ($7.7-bn) loss at French bank Soci茅t茅 G茅n茅rale. In March, over 拢3 bn ($6 bn) was wiped off the value of British bank HBOS in less than an hour after traders spread false rumours of problems at the bank.
Those recent examples, combined with general 鈥渃redit-crunch鈥� jitters following the collapse of the US sub-prime mortgage market, have driven a surge in interest in smart surveillance software, said David Paris from the financial markets consulting unit of IBM.
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Companies are all starting to say, 鈥渙h gosh, we need to do that鈥�, he adds.
Early warning
Systems that record and monitor employee activity are designed to alert bosses before too much damage is caused. They can also help companies collect huge amounts of internal information that may be needed in the face of lawsuits or to meet demands from regulators.
US politicians and legislators in other countries are all demanding tougher rules in the wake of the US sub-prime mortgage scandals and subsequent financial crisis.
鈥淲ith the credit crisis and so on, people started to be much more careful,鈥� said Ruggero Contu, principal research analyst at information technology consultants Gartner.
The company predicts that these technologies will boom in value to $760.5 million this year, from $524.5 million in 2007.
Surveillance boom
Many companies鈥� employment terms routinely maintain the right to monitor an employee鈥檚 electronic correspondence if made on company property.
In Britain, for instance, this is allowed if staff are informed and 鈥渢he benefits outweigh the risks to individuals鈥� privacy鈥�, according to the UK .
Instant-message surveillance software from companies like FaceTime Communications and Akonix are just two examples of the kind of software that has seen a surge in interest.
These programs monitor instant messaging conversations in real time and send bosses alerts when certain key words, names or number combinations are typed.
However, as well as enabling banks to catch future rogue traders early, the new software will also draw criticisms about privacy and perhaps lawsuits from employees claiming it has been used against them unfairly.
