What Are False Positives in Financial Compliance Costing You?

How Integrated Capture, Analytics and Surveillance Can Help

In the finance industry, where speed and accuracy are paramount, institutions face mounting pressure to maintain regulatory compliance while ensuring operational efficiency. False positives are a costly and persistent challenge that can undermine both objectives.

So what are false positives? In financial compliance, false positives are incorrect alerts or flags of suspicious activity. As transaction volumes increase and regulations evolve, failing to address false positives can erode resources, drain profitability, and expose firms to heightened risk.

In this blog, we explore the hidden costs of false positives and demonstrate how integrated capture, analytics and surveillance solutions can transform financial compliance processes and optimize business performance.

The Real Cost of Compliance False Positives

False positives affect institutions in numerous ways, and their impact reaches beyond the surface of inefficiency. Here are the key cost implications:

• Regulatory risks and missed threats: An increase of false positives can mask real compliance breaches. When teams are overwhelmed with noise, the likelihood of missing true positives and genuine indicators of fraud, money laundering, or market abuse increases. Regulatory penalties for failing to detect illicit activities can result in financial loss, reputational damage, and lasting regulatory scrutiny.
• Labor, resource and infrastructure strain: Every false positive requires investigation. Compliance teams must allocate valuable time and resources to review and close incorrect alerts. This process diverts attention from genuine risks and more strategic compliance activities. Repetitive manual reviews leave employees drained—impacting morale and leading to high turnover and more recruitment and training.
• Operational costs: Managing false positives drives up costs across both human and technological resources. Managing large compliance teams can quickly drive up staffing costs. On top of that, inefficient systems that trigger too many false positives put extra strain on your technology and increase operational costs.

The Power of Three–Integrated Capture, Analytics and Surveillance

The combination of Verint Financial Compliance (VFC) capture and finance-focused speech transcription and analytics with SteelEye’s AI-driven communications surveillance platform provides compliance teams with total coverage, delivering deep insights into trading behavior and compliance risks.

By aligning capture, analytics and surveillance in a seamless, integrated platform, financial institutions can gain a strategic edge in compliance while minimizing operational burden.

Comprehensive Communications Capture for Complete Oversight

Reliable recording of trade-related communications is vital.

Verint’s Financial Compliance Capture solution enables financial organizations to capture, store and manage all types of regulated communications across communications channels such as voice, chat, email and video to ensure compliance with global regulations such as MiFID II, Dodd-Frank, and others.

The platform integrates with existing enterprise systems, enabling efficient compliance monitoring, reducing risk, and lowering operational costs. It provides a comprehensive approach to regulatory obligations, helping businesses streamline compliance processes.

AI-Powered Analytics for Smarter Detection

Machine learning models enable smarter detection of anomalies and risk indicators.

Unlike traditional rules-based systems that often flag benign activities, advanced analytics distinguish between normal patterns and true red flags. This supports the voice surveillance capability delivered through SteelEye, which helps firms reduce false positives and enhances the accuracy of compliance alerts.

Communications Analytics, VFC’s AI-powered speech transcription and analytics solution designed for the financial markets, goes beyond basic detection by identifying gaps in voice compliance.

It can process conversations from noisy trading floors and conference calls with market-leading accuracy using automatic language detection and multilingual transcription. This enriches the captured voice data with speaker identification, sentiment analysis, and more—all tailored to domain-specific jargon.

Read this eBook to learn about the biggest challenges posed by the evolution of communication and how Communications Analytics helps solve them.

Unified Surveillance for Proactive Risk Management

Verint Communications Analytics feeds enriched interaction data to downstream surveillance platforms like SteelEye’s to aid in reduced false positives.

SteelEye’s AI-driven communications surveillance platform provides financial institutions with advanced tools for monitoring, detecting, and reporting atypical activities such as market manipulation, insider trading, and spoofing.

It integrates trade data from more than 50 data sources, along with market news and social media, to offer comprehensive surveillance. The platform enables proactive risk detection, customizable alerts, and complete supervisory oversight, helping to ensure compliance and efficient investigations.

For more details, visit their Trade Surveillance page.

The Business Outcomes of Reducing False Positives

Firms that implement integrated capture, analytics and surveillance solutions experience measurable benefits:

• Increased efficiency: Automated, intelligent systems reduce manual workloads, allowing compliance teams to focus on high-value tasks.
• Lower operational costs: Reducing false positives cuts investigation time and decreases the need for expansive compliance staffing.
• Enhanced risk detection: By minimizing noise, firms can identify and address real threats faster, improving overall risk management.
• Regulatory confidence: Stronger, more accurate compliance systems enhance regulatory relationships and reduce the likelihood of fines and sanctions.

False positives are more than an inconvenience—they represent a significant and growing cost for financial institutions.

The good news is that advanced, integrated capture, analytics and surveillance technologies offer a clear path to reducing these burdens. Verint’s comprehensive communication capture and AI-powered analytics, combined with SteelEye’s trade surveillance solution, equip firms with the tools they need to detect gaps, optimize compliance operations, and stay ahead of evolving regulations.

Is your organization ready to turn compliance challenges into strategic advantages?

Find out more by watching our webinar: Finding the Gaps in Voice Communications—A New Approach to Financial Compliance.