Wells Fargo Scandal: Banks Tap Watson To Monitor Employee Activity

Banks and financial institutions are looking for new ways to monitor and surveil the activity of employees following the fall out of widespread account fraud scandal at Wells Fargo, Bloomberg reported.

According to the report, lenders have asked International Business Machines Corporation if it is possible to use the same technology currently implemented to monitor traders on other employees including employees of retail banks, loan officers and others.

Several regional and national banks—including some of the largest banks in the United States—are currently testing software to keep a closer eye on the activities of employees to make sure their work is compliant and won’t put customers or the bank at risk.

The software is powered by IBM’s Watson, an artificial intelligence platform that has been utilized in a number of industries but is still probably best known for playing and winning Jeopardy!

Watson has been trained to collect information that could have detected issues at Wells Fargo, where employees created as many at 3.5 million fake checking and credit card accounts for customers without their permission.

The software can identify suspicious login activity, unusual levels of unused accounts, incorrect contact information and changes in notifications settings that would be used to disguise illicit activity.

IBM’s applied supercomputer can also use its understanding of human language to sift through piles of employee emails and communications to spot potential pressures applied to workers, like managers pushing for increased sales numbers.

The program would be a marked improvement over current compliance detection systems that primarily search for banned words or phrases and watch for predetermined trading patterns—a system that results in a number of false positives and can miss less obvious activity or coded communications.

The trader surveillance program that IBM built, which may also be in use for other employees, can keep track on significantly more activity and track behavior over a period of time. For instance, the program knows that if a trader starts using less profanity, it may be an indication that they are trying to be more cautious—a potential sign of misconduct.

In addition to providing monitoring services, IBM has also rolled out Watson as a guide to regulatory compliance. The company bought financial consulting firm Promontory Financial Group in order to train Watson on financial regulation. The AI can help companies ensure they are following all the rules as they provide their services to customers.

Watson is just one of the potential solutions to the employee surveillance problem that banks and financial institutions are now faced with. The ongoing revelations about the size and scope of the Wells Fargo incident has put the entire industry under the microscope.

Companies will continue to look for ways to ensure their employees are following all of the rules—if not for the good of the customer, then to avoid multi-million dollar fines like the one Wells Fargo was hit with.