eflow Global launches sandbox to help reduce false positives
Responding to regulatory pressure
The new Sandbox functionality offers compliance teams a dedicated replica of their surveillance system in which they can simulate and refine alert parameters using real historical trading data. This development comes as compliance teams continue to grapple with high volumes of false positives and intensified regulatory scrutiny.
Recent research from eflow Global indicates that 43% of regulatory professionals cite managing the volume of false positive alerts generated by their trade surveillance systems as a major concern. These false alarms can distract teams from real threats, making it harder to prioritise meaningful alerts and comply with regulatory expectations.
Traditionally, financial firms have found it challenging to experiment with their trade surveillance configurations due to concerns over compliance risks when making changes to live systems. The Sandbox aims to address this gap by enabling secure, risk-free experimentation.
Functionality details
The Sandbox provides a ring-fenced replica of a firm's trade surveillance setup. Compliance professionals can stress-test and simulate parameter alterations using historical trade data, analyse the resulting alert outcomes, and then export their preferred settings seamlessly into production systems. This tool supports efforts to reduce false positives, improve audit readiness, and adjust to changing market dynamics. "The ability to stress-test your surveillance strategy with real-life trading data in a no-risk environment is a game-changer," said Ben Parker, CEO of eflow Global. "Firms need the confidence that their alert thresholds are both appropriately stringent and operationally manageable. The Sandbox gives them that confidence - backed by real data and a clear audit trail."
This new feature is available to all users of the TZTS Trade Surveillance system, and it comes at a time when regulatory activity is rising sharply. In the first quarter of 2025, global regulatory enforcement produced over $150 million in financial penalties across six jurisdictions. Enforcement actions in 2024 increased by 863% year-on-year, highlighting the urgency for compliance functions to operate with reliable and defensible surveillance methods.
Changing market conditions
Market volatility has added to the compliance burden. Ben Parker noted recent events that have led to rapid spikes in alert volumes, including technological and geopolitical developments. "Recent market shocks, such as the release of DeepSeek AI and its ripple effect across NVIDIA and the wider NASDAQ, as well as the renewed volatility following President Trump's recent tariff announcements, have shown how quickly alert volumes can spike," added Parker. "The Sandbox gives firms a way to replay these periods, refine parameters in response, and ensure robust controls are in place."
Given this context, compliance teams are increasingly required by regulators to demonstrate that their surveillance parameter tests are based on real evidence and robust processes. The capability to playback historical data and visibly adjust controls provides them with the audit trail necessary to validate their surveillance procedures during regulatory reviews.
The system's audit support is designed to help financial firms demonstrate regulatory compliance, improving their readiness for inspections and inquiries. Firms can trace decisions regarding alert configuration changes directly to historical data events, helping to prove that their controls are suitable for evolving market and regulatory conditions.
Availability and industry implications
The Sandbox is now included for all users of TZTS Trade Surveillance. It is positioned to support both immediate adjustments arising from current market movements and ongoing strategy reviews aimed at reducing false positives and demonstrating compliance diligence.
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