JP Morgan has been hit with a £33m fine for failure to protect billions of pounds worth of their clients’ money. More specifically, the FSA discovered that JP’s futures and options business was keeping up to £23bn in institutional client money mixed up with its own funds in an unsegregated account at the securities division’s parent bank.
“The case of JP Morgan being given a £33M fine for mixing up its clients’ and its own money shows either a total disregard for due process or, as is more likely, poor implementation of process,” commented Dr Giles Nelson, deputy CTO of Progress Software. “Processes dealing with the investment of a client’s money are complex and change and evolve as the market and regulatory environment changes. Software can help in bringing discipline to these processes such as ensuring the right people are involved at the right step and that all required documentation has been completed to an appropriate standard. This disciplined approach reduces the room for human-error.”
“More than this though, the use of process management software will automatically give an audit trail to show that everything has been done correctly. Great for a compliance officer in a bank to not only report internally but also as something to use with a regulator. As well, too often organisations know about errors too late. Too often reports give a view of distant history – these reports are created infrequently and using old information. There’s no excuse in not having information available immediately to give a “live” view of exactly what’s going on.”
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