Q&A with Farzad Mashayekhi about Modeling, Analytics and AI

Farzad Mashayekhi, a managing director in Global Compliance, leads the Financial Crime Compliance Engineering team that recently won the Celent Model Risk Manager Award for Data, Analytics, and AI. 

Farzad joined the firm in 2010 as a vice president in the Surveillance Analytics Group after other roles specializing in financial modeling and risk mitigation.  He earned a BS in Mechanical Engineering from University of Tehran, as well as advanced degrees in Finance (MS) and Financial Economics (PhD) from University of Illinois at Urbana-Champaign.

We asked Farzad about his career path, his passion for risk management and technology, and the importance of always learning.

1. How did you become interested in algorithms and risk management?
I gravitated towards math and subsequently engineering in my earlier education and pursued Finance for grad school. My career has been at the intersection of math, data and programming, from building applications to managing credit risk in a start-up in San Francisco, to building derivative trading models generating alpha in a prop trading firm in Chicago, to finally building surveillances to manage regulatory and reputational risk in New York. When I joined the firm, I was part of the newly created Surveillance Analytics Group (now Compliance Engineering) right after the financial crisis. The intersection of big data and analytics was getting more and more attention, and I thought it would be an interesting domain for years to come.

2. What type of projects do you and the team work on?
Our mandate is to help the firm manage its reputational and regulatory risk, in particular when the risk relates to financial crime. Financial crime covers a large set of activities such as money laundering, sanctions, and insider trading to name a few. We build surveillances to manage these risks effectively, that means our surveillances should not miss suspicious activities with a high signal-to-noise ratio.

3. In helping to protect the firm and its clients against financial crimes, how do you identify the opportunities to mitigate risk?
It’s definitely a fast-moving world and we know that bad actors have many methods for trying to commit fraud against financial institutions—so we need to be vigilant and keep on top of all trends. I have a strong team around me and we try to never stop learning. Collectively we need to stay alert on multiple fronts; for example, on how technologies are evolving and changing, how new ones are becoming available, and how the regulatory risk landscape is evolving. By keeping current with trends, we can determine the best path forward for focusing our work and resources on building tools to help the firm manage these risks efficiently and effectively.

4. How does your team help the firm and our clients?
We partner with compliance officers to build surveillance systems to manage the firm’s regulatory and reputational risks and protect our clients and our shareholders. By effectively identifying matters which require further investigation and consideration, and by efficiently raising the fewest false positives for further review and investigation, we can best protect the firm, our customers and our shareholders. Our aim is to be highly effective and highly efficient at the same time — something that delivers great value to all our stakeholders.