IB start-up Palantir helps Credit Suisse investment bank create a system for identifying unscrupulous traders

On Habré and in the analytical section of our website, we write a lot about stock market trends and keep track of interesting financial industry news. And today we will discuss the cooperation of the scandalous information security startup Palantir with Credit Suisse.

The head of the investment bank Credit Suisse Tijay Tiam in an interview with Bloomberg TV said that some of the company's traders performed risky operations in the financial markets without the consent of management. These actions led to serious losses.
')
In order to prevent such situations in the future, the Swiss bank will develop a new management strategy and will strengthen control over traders - for this, the technology of the Palantir startup associated with the US National Security Agency will be used.

What is the problem

In mid-March, Credit Suisse CEO told reporters that the company's financial statement for the first quarter would be disappointing. A certain role in this, according to him, was played by the short-sighted policy of traders who made decisions without consulting with managers. Bank traders invested in troubled debts and other illiquid assets. “Neither I, nor any of the financial directors were aware of many operations until January,” Business Insider quotes Tiam.

The statement by the head of Credit Suisse appeared along with the release of the updated financial strategy of the bank. The organization is going to radically reconsider its portfolio of investments in global markets, due to the apparent decline in their profitability.

Credit Suisse predicts a decrease in the level of profitability of markets in the first quarter by 40-45%. In this case, the company is waiting for the write-off of $ 258 million from investments in securitized products, distressed debts and on providing financial guarantees. Optimization also provides for the reduction of 2 thousand employees of the bank.

The company is going to get rid of troubled debts, European securitized products and, in general, any long-term illiquid assets.

Discipline and total control

Now the company will “re-educate” its traders and instill in them respect for managers and discipline. “Most of our problems are due to the fact that our people are trying to increase profitability by any means, often, thus, exceeding the fixed level of maximum costs,” journalists quoted Tidjam Tiana.

The head also added that those who are guilty of the company's trading failures will soon receive a well-deserved punishment. He is confident that now the leadership of the cavity controls the situation and will not allow such things to happen in the future.

Last week it became known that Credit Suisse entered into an agreement with the US private intelligence agency Palantir (one of the most expensive startups in the world, many are convinced that this company is behind the sensational PRISM intelligence program).

As Bloomberg journalist Jeffrey Voegeli found out, the investment bank plans to monitor the behavior of all its employees in order to identify those who may violate the company's internal rules and legislation even before a person does it.

In particular, the system will track the traders' operations, analyzing the fact that they correspond to the “normal behavior” in a normal situation. In addition, factors such as a particular employee’s attendance on financial compliance training and regulatory requirements, or any violations of financial discipline and company rules in the past will be taken into account.

The cooperation of Credit Suisse with Palantir is not the first time that a financial company has developed an algorithm for identifying unscrupulous employees. In the spring of 2015, it became known that the international financial company JPMorgan Chase & Co is developing a program that allows identifying traders who may incur losses even before real problems arise. The introduction of the system in all divisions of JPMorgan was planned in 2016.