U.S. bank JPMorgan Chase turned to technology used in combating terrorism in order to detect fraud risks among employees and to decide the price at which to sell properties used for guaranteeing mortgages with problems, reports the Financial Times.
The technology involves using a large volume of data to identify patterns difficult to predict in the evolution of financial markets, and behaviors of employees that could hide the risk. Other banks began also to use large amounts of data to identify traders who can cause huge losses, say experts in the field.
“They’re trying to mine not just trading data, but also emails and phone calls. They’re trying to find the needle in the haystack,” said David Wallace, an executive at SAS, a US company involved in data analysis.
JPMorgan’s communication director, Guy Chiarello said the bank analyzes large volumes of data “in dozens of projects” that promise to have a major impact on business. Chiarello refused to provide further details.
According to sources close to the situation, JPMorgan used for some activities related to these projects the services of a Silicon Valley company, Palantir Technologies, that has developed the technology working for U.S. intelligence. The bank first used such methods to detect hackers trying to crack customer accounts or ATM cards, but has recently begun to use the same technology for its 250,000 employees.
Also, JPMorgan uses extremely diverse information about local economic situation in case of mortgages with payment problems, said two sources. The information is used to determine the sale price.
Other companies active in this field find also new areas of activity, such as risk management, credit assessment or marketing activities for data analysis techniques used by the intelligence services.
Quantifind, a company that worked with the CIA to identify false names used by terrorists, was called by JPMorgan to discuss how the technology can be applied to the credit card business, said general manager Ari Tuchman.
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