In an effort to curb its legal bills stemming from defending rogue employees, JPMorgan Chase is piloting a surveillance program in its trading business to monitor workers to see if they have the potential to violate banking laws or securities regulations.
The New York City-based financial services company has developed software to track certain behaviors, such as whether workers may violate personal trading rules or breach market-risk limits — or even if they skip compliance classes, according to a Bloomberg article Wednesday.
“It’s very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader,” JPM executive Sally Dewar told Bloomberg. “The idea is to refine those data points to help predict patterns of behavior.”
The company is also building a surveillance unit to monitor electronic and telephone communication in the investment bank. The program will be expanded to JPM’s global investment-banking and asset-management divisions by 2016.
Some observers are wary of judging workers before they do wrong. “What they’re trying to do is forecast human behavior,” Boston University lecturer Mark Williams told Bloomberg. “Policing intentions can be a slippery slope. Do people get a scarlet letter for something they have yet to do?”
But Dewar, a former U.K. regulator, told Bloomberg that JPM would strive to strike “the right balance in monitoring employees.”