In linguistics, combining words from different languages within the same phrase is called language switching or code switching. When talking about language switching outside of academia, many may think of James Bond movies, double-agents and spies; in other words, risky behaviour. That’s not necessarily off the mark when it comes to trading and the financial industry. For instance, if a trader or another employee at a financial institution uses more than one language in a sentence or a conversation, it may show an intent for committing fraud – something that regulators have been trying to watch out for lately. Here’s a look at the recent past to figure out some of the reasons for this monitoring.
Since the 2007-2008 financial crisis, regulators all over the world have buckled down to curtail problematic behaviours and practices, and fine offenders. According to an annual industry report published by the Boston Consulting Group in February of this year, banks worldwide have paid a total of $345 billion in fines between 2009 and 2017. In North America, banks have paid $220 billion, or 64% of the total, while the penalties accrued by European banks account for or $125 billion, or the remaining 36%, for the same period.
Now, let’s time travel. Imagine it’s the year 2020 and you are looking at your annual report for 2019. It reveals three key achievements: 1. you have saved your analysts countless hours of work; 2. you have been on top of internal audits; and, 3. you have complied with external investigations quickly and openly. In addition, your institution has been cited as an example in the fight against financial crime. Sounds great, doesn’t it?