Demand for market surveillance systems in the last few years has been driven by regulations and compliance requirements for issues related to Benchmark Manipulation and similar transgressions. The onus is on market participants to ensure they keep tabs on their trading activities.

In the report Market Surveillance Systems for the Sell Side and the Buy Side, Celent covers the product offerings of eight of the leading vendors. Although many sell side firms are using surveillance systems to ensure that they meet regulatory requirements, the more sophisticated firms are hoping to get a holistic perspective of their internal data. These systems allow them to optimize their data management strategies and plug any holes in their systems and processes. For these firms, surveillance systems offer a means of testing their capabilities regularly through scenario-building and case management.

Regulation is a key driver, as expected. Other important drivers include the move to real-time surveillance, a growing emphasis on analysis of communications, and the analysis of big data.

This report analyzes the specific products of the leading surveillance vendors. It discusses some of the coverage areas for surveillance products across the leading vendors. While the focus of the various vendors differs, there is also a fair degree of overlap in what most of them seek to provide. This discussion is followed by an overview of the functionality on offer for the various leading market surveillance systems currently serving the needs of the sell side and the buy side. Finally, we consider the expected areas for future product development.

“Some of the differentiators included having open or flexible architecture, having the ability to offer the product as a cloud service, and the capability of the product to analyze the various types of structured and unstructured data related to trading platforms,” says Dr. Anshuman Jaswal, a senior analyst with Celent’s Securities & Investments practice and author of the report. “From the point of view of innovation and the requirement for more sophisticated systems and processes, sell side firms again dominate this space as a client segment.”