Too much talk of your “lunch date with a vat of guac” will come back to haunt you.

…financial firms are tapping a cottage industry of software companies that use complex algorithms to monitor traders’ calls and emails—looking for catchphrases as well as changes in tone—to try to detect signs that traders may be colluding or placing unauthorized bets. The hot list of phrases ranges from the obvious to the obscure: “nuclear waste” and “take it offline” are potential red flags, according to Chase Information Technology Services Ltd., a small British technology company. But so, too, are any repeated phrases that have nothing to do with the job. In other words, traders better have a good reason for mentioning their lunch plans more than once. “End of the world” could, too, as could “on ice.” Chase IT says its software can search for unusual phrases and help detect when staff are having affairs. The software, called Intelligent Voice, also measures levels of stress in traders’ voices, which can be cross-checked with their electronic messenger traffic for any wrongdoing. The software even accounts for cultural ambiguities. For instance, Britons tend to interrupt their colleagues in midconversation only when they are highly stressed, says Nigel Cannings, technical director at Chase IT. This “isn’t so much the case with Italians,” he adds…

To develop its voice-analyzing algorithm, Chase IT used 100,000 hours of trading conversations and instant-messenger transcripts. Once installed in a bank, the algorithm develops a voice fingerprint of any person calling in to or out of the trading floor. It also turns the voice into text and scans for code words by looking for unusual word combinations. Besides repetition of phrases with no obvious connection to the job, other signs of misconduct could be a trader unexpectedly speaking in a foreign language. This information is presented to compliance officers in the form of diagrams showing who is talking to whom and graphs that show stress levels across the trading floor. Alerts can be emailed or the charts refreshed on a daily basis.

Banks Listen In To Trader Talk [wSJ]

7 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (7)

  1. Posted by guest | December 6, 2013 at 1:57 PM

    mmmm….vat of guac..

  2. Posted by Short, But Long | December 6, 2013 at 2:20 PM

    As a master of gibberish, I accept your challenge and vow to ensure that the phrases "UBS Sucks", "Shazar", and "Cap'n Crunch" make the list.

    You're move Chase IT, you're move.

  3. Posted by Short, But Long | December 6, 2013 at 2:21 PM

    Dammit.. Grammar Quant, you around? Need some help.

  4. Posted by Webster | December 6, 2013 at 2:26 PM

    Other concerning terms / phrases:

    UBS Sucks
    MBA v CFA

  5. Posted by Bored Guest | December 6, 2013 at 3:06 PM

    I like the cut of your jib, except you should insure that you're frazes are sanded.

  6. Posted by Buy side | December 6, 2013 at 3:09 PM

    Smart move – hiding in plain sight. Can you imagine a legitimate trader with decent grammar?

  7. Posted by Guy with A.D.D. | December 6, 2013 at 3:34 PM

    Don't forget "Mozilo-ed"