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Trade surveillance ROI: cost-benefit analysis and business case

This article offers a clear framework for identifying where value in trade surveillance is created and how to demonstrate it in terms that resonate with stakeholders.

Published 2025-09-19
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Every day, surveillance teams review and manage thousands of alerts and prepare for the next audit. 

But when it comes to securing investment or justifying system upgrades, numbers matter more than intent.

How many hours are saved by reducing false positives? What’s the cost of a delayed STOR (suspicious transaction and order report)? How much risk was avoided last quarter, and how do you prove it?

These are the questions boards and budget holders expect clear answers to. 

That’s why return on investment (ROI) is becoming a key metric for surveillance programmes. 

Not as a buzzword, but as a practical tool to prioritise resources, measure performance, and strengthen your case for change.

This article offers a clear framework for identifying where value is created and how to demonstrate it in terms that resonate with stakeholders.

Why ROI is a boardroom conversation

In recent years, trade surveillance has become a strategic investment. 

Regulators expect effective systems, boards want measurable returns, and budget holders need to justify every technology and staffing decision.

Proving the return on investment (ROI) from surveillance programmes goes beyond avoiding fines. 

It’s about efficiency gains, reputational protection, and allowing business growth without increasing compliance headcount.

What ROI means in trade surveillance

ROI in trade surveillance captures the value your monitoring systems deliver compared to their cost. 

It reflects both measurable efficiencies and broader organisational benefits, such as:

  • Lower false positive rates, freeing analyst time for real cases.
  • Faster investigations and STOR preparation.
  • Reduced regulatory penalties and associated reputational costs.
  • Enhanced market integrity that supports client trust and retention.

ROI impact areas checklist

The main areas where surveillance ROI delivers measurable impact are:

  • Compliance risk reduction - Avoidance of fines, sanctions, and remediation costs.
  • Operational efficiency - Time saved through automation and false positive reduction.
  • Regulatory relationship - Fewer audit findings, faster responses to requests.
  • Market integrity – Increased client and investor confidence.
  • Scalability – Ability to grow trading volumes without proportionally growing headcount.

For optimisation strategies, read our article on trade surveillance best practices.

Common barriers to demonstrating ROI

Proving ROI can be difficult without the right foundations. 

Some of the most common barriers firms face are:

  • Lack of baseline metrics before implementing changes.
  • Failure to quantify time savings and operational improvements.
  • Underestimating reputational risk reduction as a value driver.
  • Siloed data that makes it difficult to measure end-to-end impact.

Best practices for building the business case

Building a strong business case for surveillance requires clear evidence of value. 

The following best practices help firms demonstrate ROI in a way that resonates with both regulators and decision-makers:

  1. Establish baseline metrics: Measure alert volumes, false positive rates, investigation times, and compliance incidents before changes.
  2. Quantify time savings: Translate reduced investigation times and false positives into hours saved.
  3. Include risk avoidance: Estimate potential fines or losses avoided through improved detection.
  4. Show growth enablement
    Highlight how the system supports increased volumes or new asset classes without extra headcount.
  5. Use real-world examples
    Reference internal case studies or external enforcement actions to frame potential costs.

Sample ROI calculation

A simple example shows how even modest improvements in surveillance efficiency can translate into significant annual savings.

Scenario:

  • A system generates 8,000 alerts per month, with 80% turning out to be false positives.
  • Analysts spend an average of 30 minutes reviewing each alert.
  • A system for market and trade surveillance reduces false positives by 50%.

Impact:

  • 3,200 fewer false alerts per month.
  • 1,600 analyst hours saved over a year.
  • At €60 per hour, that equals €96,000 in recovered time.
  • €200,000 in estimated fines avoided through improved detection.

Total Annual ROI: approximately €296,000 in measurable benefit compared to the cost of running the system.

Looking ahead: ROI as a compliance KPI

ROI reporting is on its way to becoming a central compliance benchmark. 

Regulators are moving beyond the question of whether surveillance systems exist, focusing instead on how effectively they deliver value.

Firms that can demonstrate clear returns in efficiency, risk reduction, and governance, will not only secure stronger internal support and budget but also build greater trust with supervisors and stakeholders.

Final word

ROI in trade surveillance demonstrates that compliance can be effective, scalable, and a core part of business success. 

With the right approach, surveillance becomes both a safeguard and a value driver.

Talk to a Trapets expert to see how we can help you build a business case that inspires confidence and delivers results.