Global trade surveillance market is expected to reach million by 2026 and is projected to register a healthy CAGR of 18.2% in the forecast period of 2019 to 2026. Some of the major players operating in this market are Software AG, FIS, SIA S.P.A., Celent, ACA Compliance Group Holdings, LLC, Scila AB, CINNOBER FINANCIAL TECHNOLOGY, Trapets AB, Abel Noser Holdings LLC, Crisil Limited, Cognizant, IPC System, Inc., Aquis Technologies, OneMarketData, B-next, IBM, Accenture, Nasdaq, Inc., and others.
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On the basis of component the market is segmented into solution and services. The solution is sub- segmented into services reporting and monitoring, risk and compliance, case management, surveillance and analytics and others. The service is sub-segmented into professional services and managed services. The professional services is further sub-segmented into support and maintenance, system integration and consulting.
On the basis of deployment model the market is segmented into on-premises, cloud and hybrid.
On the basis of organization size the market is segmented into large enterprises and small and medium-sized enterprises (SMES).
On the basis of vertical the market is segmented into banking, financial services, and insurance (BFSI) and capital markets. The capital market is sub-segmented into securities, hedge funds, wealth management, asset management and others.
Drivers: Global Trade Surveillance Market
RAPIDLY INCREASING DEMAND FOR MONITORING TRADE ACTIVITIES
The monitoring trade activities played a crucial role in trade surveillance market due to the complex form of trading which is offered by the financial instruments. On normal, the market structure is quite complicated and more variable, thus increasing the transaction volumes in financial market.
It has been observed that financial institutions have taken several measures to tackle the risk based conditions such as suspicion of money laundering, terrorist financing and insider trading in between the financial institutions.
- According to FINTRAIL LTD. in between October 2015 to march 2017, nearly 6.5 lakhs money laundering activities were detected through the trade activities in financial institutions. All this money laundering cases are submitted to the U.K. Financial Intelligence Unit (FIU) for verification of financial data and documents. It has been estimated that nearly 600 billion to 1.5 trillion of dirty money are laundered every year in the world.
BENEFITS PROVIDED BY SURVEILLANCE TO REDUCE THE MARKET ABUSE
The market abuse witnessed many circumstances in financial investors market, where the investors and employees of financial institutions were involved in the misleading or sharing of information about the price setting mechanism and takeover bid, which caused manipulation of data and insider dealing.
The surveillance is used to identify and protect the market abuse in financial and banking industries, where they analyze the order data book, benchmark services, suspicious transaction and reporting data. It is also used to protect them from corporate information occurring such as decrease of capital, insolvency, issuing of stocks and liquidation.
- On May 2010, the Securities and Exchange Commission (SEC) implemented an enforcement surveillance that is used to plan and maintain the consolidated audit trail of perspective computerized trading activities.
DIFFICULT TO ANALYZE THE REAL TIME FRAUD DETECTION
Although the application of trade surveillance is increasing day by day in many developed and developing countries for detecting and protecting the capital and stock market from market abuse and manipulation but it gets challenged by the real-time detection of fraud related issue at financial and banking sectors. Most of the time, cyber hackers target the real-time operations such as online channel transactions, enhanced credit and fraud risk management because in such cases criminals can change their tactics with which they will be able to access multiple portfolio and business lines.
- According to Central Bureau of Investigation (CBI), the bank frauds have been increased by 120% of 23,900, where 10,400 cases are reported due to individual fraudsters and hackers syndicates. They use the knowledge of banking, technology and insider data to execute the fraudulent transactions.
LACK OF KNOWLEDGE REGARDING PROFESSIONAL TRADING
For survival at the financial market each and every individual needs some knowledge about the stock market and capital markets. So, the professional traders need to grasp some ideas and plans to secure and protect their market shares and capital holdings from fraudsters.
Lack of financial market knowledge leads to carry out the inherent risks of security breaches because most of the beginners try to do the financial transactions from mobile banking apps or from social media channels which are more prone to malware attack.
- In 2016, The Securities Investors Protection Corporation (SIPC) estimated that Americans fraud investments cost nearly USD 45 billion a year by the beginner’s traders that offers a protection and secured services against the fraudsters and scammers.
RISING DEMAND FOR TIME SERIES DATABASES AND LOW LATENCY
The increasing demand for trade surveillance in financial markets environment over the past several years has been driven by the need for time series database and low latency. Now a day, the automated capital market focuses on managing information through latest technology based applications.
But most of the financial institutions and banking sectors uses relational database management systems (RDBMSs), which is unable to offer appropriate reliability, speed and flexibility due to lack of low latency database system.
- For instance, eXtremeDB embedded DBMS from McObject, LLC offers a better result in low latency database management which is highly proficient for In-memory database system (IMDS) design structure. It is enhanced with a memory manager and an internal transaction that delivers maximum efficiency while working in multi-processor systems and multi-threaded applications. The time series database gradually provides hybrid storage which can be supported in both real time and historical data with the single database architecture and streaming data.
COMPLICATED DESIGN OF SURVEILLANCE SYSTEMS
The trade surveillance system design is complex as it needs to maintain the clear prioritization according to the device which is being integrated. The design also needs to maintain the features such as real time automated system for detecting several transactions. This requires the designers to be cautious while selecting the design surveillance system.
Most of the time the database is built with a core in-memory database system which is more secure and protective as well as more complex due to availability of low-latency database technology. It also provides financial applications which ensures the persistence, data integrity and supports clustering of multiple servers.
- In 2011, TCS (Tata Consultancy Services) launched a trading and surveillance platform solutions which offers low TCO, robust architecture and high performance in market infrastructure space. The solution prevails about current inefficiency in disparate systems and usage of expensive infrastructure.
RUTHLESS BUSINESS MODEL AND NON- STANDARDIZATION OF COMPLIANCES
The trade surveillance business model of financial institution and banking sector is quite ruthless due to many processes and little value. In many cases over standardizing process is rigid and decreases the responsiveness of the traders while transacting the capitals in stock markets and financial institutions.
The non-standardization of compliances creates an unexpected problem during the employee individual evaluation processes, and tracing the quality of data related to transactional markets. Most of the companies today use the old RDBMS (relational database management system) technology, which is low proficient and mostly prone to cyber-attacks.
- Now companies are focusing on eliminating a lot of duplicates and cut down from the sheer numbers of processes in transactional trading of capitals. The financial institutions use the time frame tracking and variant costing to calculate the cost and time between standard process and variations.
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