JPMorgan Chase has turned to technology used for countering terrorism to spot fraud risk among its own employees and to tackle problems such as deciding how much to charge when selling property behind troubled mortgages.
The technology involves crunching vast amounts of data to identify hard-to-detect patterns in markets or individual behaviour that could reveal risks or openings to make money. Other banks are also turning to “big data”, the name given to using large bodies of information, to identify potential rogue traders who might land them with massive losses, according to experts in the field.
“They’re trying to mine not just trading data, but also emails [and] phone calls,” said David Wallace, an executive at SAS, a US data analysis company. “They’re trying to find the needle in the haystack.”