Insiders guide to audio analytics New opportunities in litigation and investigation

Transcription

1 EY Fraud Investigation & Dispute Services Legal, Compliance and Technology Webcast Series Insiders guide to audio analytics New opportunities in litigation and investigation 17 March 2016

2 Today s speakers Moderator: Alex Perry, Ernst & Young LLP, US Speakers: Jessica Escalera, Barclays Tyrone Edward, Ernst & Young LLP, UK Page 1

3 Objectives This webcast will focus on the emerging trends in audio analytics for legal and compliance functions, including: The expanding role of audio data in regulatory response and litigation Key advantages of technology-based audio analytics Leading practices in managing and reaping new benefits from the complex population of audio data Page 2

4 Many companies are realizing the benefits of forensic data analytics (FDA) tools We currently get positive results or recoveries from the FDA tools that we use. 56% agree Source: EY 2016 Global Forensic Data Analytics Survey but what about audio analytics tools? Page 3

5 Polling question #1 Do you know where and how your audio is stored? A Yes B No C We don t have audio data Page 4

6 Why audio analytics? How much do you know about your company s audio data? Where is your company s audio data stored? In what format is your company s audio data stored? If the regulator came knocking, would you know the content of your audio files? Would your company be prepared for an investigation? Page 5

7 Polling question #2 How is audio data used in your organization? A We don t have any audio analytics capability. All analysis is done manually. B We use audio analytics in investigations. C We use audio analytics in proactive monitoring activities. D B&C E We don t have audio data. Page 6

8 Recent cases and investigations US The Consumer Financial Protection Bureau (CFPB) presented two cases involving speech data in its Winter 2015 Supervisory Highlights report. The investigation against consumer reporting agencies revealed that the CFPB has the authority to investigate recorded call center conversations, scripts and processes. Audio data was specifically reviewed and addressed in the CFPB s 2015 Supervisory Highlights concerning supervision of creditors collecting due payments. Page 7

9 Recent cases and investigations UK Financial Conduct Authority (FCA) The FCA handed a 227 million (US$340 million) fine to a large financial institution, its largest ever for LIBOR and EURIBOR-related misconduct. The bank took a considerable amount of time to identify and produce the relevant audio recordings requested. In the end, the bank s faulty phone recording system failed to adequately allow monitoring of its traders. Serious Fraud Office (SFO) Tom Hayes became the first individual to be convicted by a jury for the manipulation of LIBOR. The court listened to excerpts from both electronic communications and telephone conversations between him and his middlemen. Based on the above, the court identified evidence that led to LIBOR rigging. Page 8

10 Polling question #3 How many audio reviews did your company participate in last year? A None B 1 10 C D >30 E Don t know Page 9

11 Two key audio analytics technologies Phonetic search Automated speech recognition k ae n s eh I C A N C E L In phonetic search, an algorithm determines the phonetic closeness between a search term and a raw audio stream. On the basis of a predetermined confidence threshold, the system then outputs a hit report listing the time-stamped occurrences, if any, of each search term item in each call. An ASR speech recognition system converts a raw audio stream to a hypothesized natural language transcript, and any searches for specific terms are subsequently run over the resulting text transcript. Page 10

12 Key technologies compared How it works Phonetic search Algorithm determines the phonetic closeness between a search term and a raw audio stream. Automated speech recognition Speech recognition system transcribes a raw audio stream, and terms are searched in the transcript. Accuracy Broadcast news 90% 90% Conversation 65% 60% Better for Search results Proper names, fuzzy matching, out-of-vocabulary words, uncommon language varieties Broad net: many results, higher false-alarm rate Short search terms, contextsensitive search Narrow net: fewer results, lower false-alarm rate Page 11

13 Polling question #4 What is your current audio review workflow? A Traditional full audio file review B Phonetic search and hit reporting C Automated speech recognition D All of the above E Not applicable Page 12

14 Strategic choices Hypothetical: A large cable company offers a discounted monthly fee when customers bundle their cable and internet services. However, an internal review reveals that in some calls, customer service representatives did not mention the bundling requirement. The company wishes to identify all such calls in order to proactively correct the misleading interactions with customers. Potential call analytics strategies: A fully automated classifier Partial manual review Prioritized manual review Page 13

15 Considerations and caveats Key considerations: The goals of the analysis (determined, for example, by the precise regulatory requirements at play) Data quality System performance Caveats: There is no panacea that can entirely eliminate the need for human review and domain-specific expertise. Data quality and technological limitations sometimes limit the use of automated analytics. Even in the best of conditions, human review of some calls is necessary to develop classification logics, tune speech analytics models and validate the models output. Technology-based speech analytics solutions do not replace the need for domain-specific expertise in enforcement, discovery and fraud detection. Page 14

16 Polling question #5 How many audio reviews do you expect your company to participate in next year? A None B 1 10 C D >30 E Not applicable Page 15

17 Where is audio analytics heading? Today: Revised Federal Rules 26(b)(2)(B) stipulate that electronically stored information (ESI) doesn t need to be produced if the source is not reasonably accessible because of undue burden or undue cost. How long can we hide behind it? Regulators are investing in audio technology. Software companies and developers are rapidly improving audio technology. Page 16

18 Questions and answers Upcoming webcasts: Electronic communication surveillance and analytics Thursday, April 28, :00 p.m. 1:00 p.m. Eastern Time Anticipating pitfalls in cross-border antitrust ediscovery Thursday, May 19, :00 p.m. 1:00 p.m. Eastern Time Page 17

19 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. About EY s Fraud Investigation & Dispute Services Dealing with complex issues of fraud, regulatory compliance and business disputes can detract from efforts to succeed. Better management of fraud risk and compliance exposure is a critical business priority no matter the industry sector. With our more than 4,200 fraud investigation and dispute professionals around the world, we assemble the right multidisciplinary and culturally aligned team to work with you and your legal advisors. We work to give you the benefit of our broad sector experience, our deep subject-matter knowledge and the latest insights from our work worldwide EYGM Limited All Rights Reserved ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com