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Zero-Revelation RegTech: Detecting Risk through Linguistic Analysis of Corporate Emails and News

Authors: Sanjiv Ranjan Das; Seoyoung Kim; Bhushan Kothari;

Zero-Revelation RegTech: Detecting Risk through Linguistic Analysis of Corporate Emails and News

Abstract

Natural language processing is a fast-growing area of data science for the finance industry. The authors demonstrate how an applied linguistics expert system may be used to parse corporate email content and news to assess factors that predict escalating risk or the gradual shifting of other critical characteristics within the firm before they manifest in observable data and financial outcomes. The authors find that email content and news articles meaningfully predict increased risk and potential malaise. The authors also find that other structural characteristics, such as average email length, are strong predictors of risk and subsequent performance. Implementations of three spatial analyses of internal corporate communication, (i.e., email networks, vocabulary trends, and topic analysis) are presented. The authors propose a regulatory technology solution to systematically and effectively detect escalating risk or potential malaise without the need to manually read individual employee emails.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
8
Top 10%
Average
Average
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