While firms are obliged to keep a complete record of business communications per regulations, it can often be the case that communications surveillance investment gets put on the back burner. Budget is an ever-present consideration, and to be cost-effective firms may opt to prioritize other business expenses as opposed to the upkeep of surveillance systems.
Due to this, compliance teams are consistently tasked with making a case to the C-suite for the value-add that enhanced monitoring offers. Beyond simply having a surveillance system in place, firms must routinely assess and hone controls so that they’re positioned to perform optimally and remain operationally resilient.
So, what’s the need for surveillance buy-in? Strengthening surveillance systems presents evident pay offs, such as maintaining sound risk management, team productivity, and data enrichment. By investing preemptively, firms can set themselves up for success down the line.
Surveillance: the ultimate risk insurance
Firms can think of surveillance as “risk insurance”– it often requires upfront premiums to ensure effectively operability, yet it offers the benefit of protection against considerable mishaps.
Take health insurance, for example – it may not prevent ailments from occurring, but it does give patients the ability to schedule check-ups and monitor health so that risks can be caught early on. Similarly, surveillance might not eliminate misconduct (though it helps), but it gives firms the ability to identify and mitigate risks before they snowball into something more serious.
It can be tempting to elect the lowest coverage possible to avoid a higher initial premium – though, this simply delays costs as opposed to erasing them. A bare-bones surveillance system may be less of an investment early on, but may not offer the same coverage and protection that a comprehensive strategy does.
Global Relay’s Industry Insights: Compliant Communications 2024 report found that nearly 80% of respondents are employing surveillance tools to identify conduct and culture risks. While this number is promising, we’ve still seen firms fined significant amounts for gaps in surveillance systems.
These fines suggest a lapse in the effectiveness of surveillance systems, which could be because industry modernization and surveillance enhancement are not progressing at the same pace. Our Industry Insights: State of AI in Surveillance 2025 report found that two of the primary goals firms hope to achieve by utilizing advancing AI-enabled surveillance systems are reducing false positives and improving risk identification.
In addition to updating surveillance technologies to more accurately identify risk, it’s important that compliance teams regularly reassess their surveillance strategy and risk profile so that misconduct doesn’t fly under the radar.
Employing third-party surveillance tools can offer substantial optimization and efficiency benefits, such as structured data, risk classification, and noise reduction. However, firms must ensure that any third-party vendors they enlist have strong security standards and risk governance frameworks to maintain data protection.
Surveillance strategies, not transgression tragedies
A constant finding across regulatory violations over the past several years, whether recordkeeping or financial misconduct-related, is a lack of monitoring controls. Insufficient monitoring allows noncompliant behavior to burgeon, leading to operational and reputational damage.
In the case of TD Bank, which was fined a record-breaking $3 billion in October 2024, the Department of Justice (DOJ) noted that “inadequate AML controls and oversight” allowed criminal entities to launder over $670 million through bank accounts.
While leadership knew of these “long-term, pervasive, and systemic deficiencies” and discussed them within business communications, no moves were made to address them. If strong supervisory and surveillance systems were in place, would these issues have been tackled early enough to impede misconduct and circumvent regulatory intervention?
Likewise, U.S. regulators have emphasized that firms have failed to “reasonably supervise their personnel with a view to preventing and detecting [off-channel communications] violations” within several enforcements, such as in SEC and Commodity Futures Trading Commission (CFTC) actions against 26 firms for a combined $390 million.
With regulators continually highlighting insufficient surveillance controls within enforcements, it’s clear how integral they are to risk prevention. CFTC Commissioner Kristin N. Johnson described supervision as “the cornerstone of customer protection,” illustrating that it’s not only essential to ensuring operations internally but is also a key component of market integrity. She further stated that:
“Effective supervision and surveillance enable market participants to…address compliance failures, enhancing the integrity…of markets.”
Streamlined efficiency to stay ahead of the game
Perhaps the most anticipated benefit of all – enhanced surveillance systems offer compliance teams the ability to streamline risk detection so that they can dedicate more time to proactive risk management and increased data insights. Long term, this allows firms to maximize productivity and perform at a higher capacity.
Within our State of AI report, anonymous respondents shared that they hope to implement AI surveillance technology to address common surveillance pain points, with some goals being:
“To reduce the number of man hours spent on monitoring and to create a more precise review process.”
“Advance surveillance capabilities such as sentiment analysis…and risk scoring of alerts.”
“Improve detection, reduce false positives, and gain the ability to spot concerns at an earlier stage.”
In addition to efficiency, enhanced monitoring gives firms the power of knowledge. Data comprehensiveness has become a crucial focus; therefore, surveillance must work with recordkeeping teams to secure a clear collection of communications data. With optimum surveillance controls in place, compliance teams can understand the meaning behind data to drive better business outcomes.
In a fast-moving and highly regulated industry, complete oversight of data is essential to not only staying compliant but maintaining a competitive edge. Monitoring and maintaining surveillance systems put firms in the best position possible to stay ahead of the game.
