Sebi to tap AI, big data analytics to curb market manipulations

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Updated: January 24, 2020 6:54:23 AM

Speaking at an event, Sebi chairman Ajay Tyagi said a lot of improvement and efficiency can be brought by using advanced technology and data analytics in surveillance of capital markets.

Sebi, Ajay Tyagi, Indian financial sector, machine learning, capital markets, data lake projectAccording to Tyagi, data is fast becoming the “fourth organisational pillar” for modern financial institutions, along with people, processes and technology.

The Securities and Exchange Board of India (Sebi) is planning to set up a data lake project for improving surveillance to monitor and analyse social media posts to keep a tab on possible market manipulations. The regulator is in the process of acquiring the technology and has already floated tenders for the same.

Speaking at an event, Sebi chairman Ajay Tyagi said a lot of improvement and efficiency can be brought by using advanced technology and data analytics in surveillance of capital markets.

Sebi has already planned (a) data lake project to augment analytical capability with advanced analytical tools, namely artificial intelligence and machine learning (AI/ML), deep learning, big data analytics, pattern recognition, processing of structured and unstructured data, text mining and natural language processing, etc,” said Tyagi.

A data lake is a centralised repository that allows anyone to store all structured and unstructured data at any scale. It can help analyse different types of analytics to arrive at better decisions.

Social media platforms are increasingly being used by manipulators for market manipulation,” said Tyagi. Even without the data lake, the market regulator is already doing its own data analysis and seeing unstructured data in its surveillance department and trying to correlate with pricing volume data to come to better analysis.

We want to acquire technology and unstructured data analysis because the structured data analysis is not helping much, as manipulators use all sorts of things,” said Tyagi on the sidelines of the event. The need for further research in measuring systemic risk in the Indian financial sector is quite apparent, he said.

In the past few years, use of technology has played a major role in effecting the transformation in the capital markets, and digitisation has made capital markets industry one of the most data-driven industries. According to Tyagi, data is fast becoming the “fourth organisational pillar” for modern financial institutions, along with people, processes and technology. Going forward, technology and data are going to play an even more dominating role.

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