Fraud Prevention and Compliance in Financial Sector with WSO2 CEP Solution

Pavel Litvinov

About Company

2

• The national leader and global broker in the field of investment services

• The group’s companies operate in Russia, the USA, the EU, India, China, Thailand, Indonesia, Great Britain and other countries

• More than 319 000 clients in 40 countries worldwide

• The highest reliability rating: A++

• Financial instruments market turnover $1.2 trillion

About Company

3

Clients Broker Stock Exchanges

RegulatorsFrauds

Fraud

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Unusual orders:o Volumeo Instrumentso Frequency

Operations• Multiple Connections

from single IP• Unusual device

• Time and Location

Access

Combination

Frauds

Regulator Rules

5

Regulators

Market manipulation

Insider trading

• spoofing• pump & dump• front running• layering

Specify

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market data

Access alerts

Thief alerts

Compliance

Exchanges

Other

Trade platforms

orders/trades

orders / access

newsrisk info

Alert consumers

up to 25.000 deals per secondup to 1.0 M stock data changes per second

Why CEP

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Why CEP:

✓ Real time✓ Work with many streams ✓ Fast implement✓ Minimize coding

Why

✓ Open Source / Free✓ Tests✓ In build language - Siddhi✓ Integration in out infrastructure

Integration

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Market data

CEP

Exchanges Gates

gRPC

JMS

Converter thrift

Integration

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Access data

CEP

Trade System1

JMS

GeoIP

Trade System2

Trade System2

ESB

Backoffice, etc.

Integration

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CEP

Database

BPM

Anti-fraud portal

CRM

JMS ESB

Analyze

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eventCEP

event

eventevent

eventevent

Transform Detect

Correlate

Aggregate

Filter

event

event

eventevent

ESB

Analyze. Siddhi

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Aggregate events

window▪ time intervals ▪ count ▪ uniqueness

Filter

Correlation events

SQL-like queries

▪ Input & Output are streams

Easy to learn

Learning

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Pilot project

3 days

3 days

5 days

JMSgrpcAnalyze

Total:

Use cases

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Market manipulation - spoofing

1. Place a first small order

2. Place a technical big order in opposite direction to first one

3. Wait for execution of first order

• Milliseconds time window• Group by account and security

4. Remove technical order

Use cases

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Access thief alert

Long distance and short time

• Internet bank access

• Trade terminal access

• Bank card usage location

Use cases

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Account thief alert

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Unusual orders:• Volume• Instruments• Frequency

Operations

• Unusual device

• Time and Location

Access

Combination

Use cases

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Trading signals

Company A price changed by 2% in last 2 min

10 referrers of the company in last 20 min

Stock market

News

Use cases

18

News analyze

referrers of our company

negative words

5 times in an hour Marketing

Conclusion

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Fast implement

Improve using of existed data

New perspectives and business possibilities

BPM ESB CEP ML

Thanks