Catching the Banksters: The Use of Big Data Analytics in Billion Dollar Regulatory Investigations

Abstract

Following the financial crisis, emboldened regulators have increased the magnitude of fines levied for financial malfeasance. The automation of the data discovery process underpins the rise in internal investigations, which financial organizations are obliged to conduct on the behest of regulators, keen to reduce information asymmetries and bolster transparency. Yet little research exists into the technologies which underpin post-crisis regulatory agendas. Our study focuses on big data technologies (eDiscovery tools) which facilitate investigations, where rare yet serious breaches have occurred. We focus on the micro/data level (volume, veracity, variety and velocity) to understand how these tools are influencing regulatory outcomes. The findings illustrate the need for financial organizations to adopt robust information governance policies to ease future investigatory efforts. We identify various practices which may help compliance managers better respond to regulatory investigations faster and more easily to ease the burden of post-crisis regulation.