Artificial Intelligence (AI) and Big Data will act as police to capture unfair trade in capital markets. The Korea Exchange Market Oversight Commission announced on May 3rd that it started the operation of EXIGHT, a next generation market surveillance system developed over the past 18 months.
EXIGHT, a combination of the words EX(Exchange) and Sight, is the first domestic application of the so-called ‘Reg-tech’ that combines regulation and technology.
This is the first time that artificial intelligence and big data, which are core areas of the fourth industrial revolution, are being applied and operated in the field of self-regulation such as market surveillance, psychology, and supervision. After the introduction of Reg-tech, it is expected that the time required for unloading new unfair transactions will be significantly reduced from one month to one week.
It normally takes five days to secure data for suspicious transactions, but this number will be reduced to less than one hour. As a result, the Korea Exchange expects that it will be able to respond more quickly to unfair trade practices.
EXIGHT’s system can detect and uncover new types of unfair trades that have not been revealed previously by judging against an unfair suspicious account.
In addition, it is possible to find accounts linked to unfair transactions through reinforcement learning by using Big Data analysis. This means a shift in monitoring from simply extracting unfair practices through statistical analysis to predicting possible unfair trade practices in the future.
Experts say that it will be possible to monitor large-scale unfair trade practices in advance by identifying the trends of unfair actors suspected of being ‘operational’.
EXIGHT will operate in parallel with the existing system for the next two months to stabilize the system and will begin operation in July.
