Finding That Rogue Employee

Pirate Skull and crossed sables

JPMorgan Chase & Co. has racked up more than $36 billion in legal bills since the financial crisis. The firm clearly has incentive to identify rogue employees before they go astray. According a story in Bloomberg, the firm is rolling out a new surveillance tool to identify potential rogue employees.

I’m skeptical.

I attended a session at the FBI on white collar criminals. One of the unfortunate conclusions from the FBI’s research on white collar criminals is that many of the traits that are indicative of a white collar criminal are also the traits most companies seek in their top executives.

JPMorgan’s technology would have to identify traits that would indicate an employee is more likely to go rogue than another. A tool could apply risk ratings to employees allowing the compliance team to focus on individuals who pose a higher risk than others.

But technology is just one half of JPMorgan’s compliance initiative. The other other half is a review of the firm’s culture. Part of that review is training sessions that unfortunately use real JPMorgan incidents as examples.

I think culture wins over technology.

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