Read the latest on enabling compliant communication amid rising regulatory pressure

Friction Not Fraud

Friction Not Fraud

  • Corinna Mitchell, Gary Godshaw
  • Tech4Fin
Interested in learning how Symphony can help your firm communicate compliantly?
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The Evolution of Compliant Communication:
One Year Later

It has been a year since we originally published “Friction Not Fraud” and the topic of compliant communication continues to grip the market today: regulators have levied approximately $2 billion in fines against major banks, select firms are clawing back pay or bonuses from infringing employees, and probes are expanding to firms across the market spectrum.

As true today as a year ago, the Finance industry wants to be compliant. And as communication practices have evolved from the confines of the email inbox to WhatsApp messages on the go, our peers have been left in a gap that hamstrings their imperative for rapid client engagement.

We believe this gap – where well-meaning professionals are forced to choose between client service or communication compliance – is filled not by policy, but by technology. Technology that is readily accessible today and is delivering businesses frictionless, compliance-enabling communication.

Interested in learning how Symphony can help your firm communicate compliantly?

See how you can maximize client engagement on popular messaging channels without sacrificing compliance.
Request a demo

Foreword

Originally published February 22, 2022

Financial Services is an industry full of excellent people doing excellent work. Some might disagree, with news of regulatory fines around non-compliant business communication. But in life, the reality is often more complex than the headline.

The truth is, the Finance community is struggling to adapt to a rapid evolution in communication practices: as few as 15% of financial firms are adequately monitoring WhatsApp, for instance. Meanwhile, technology has altered how clients and colleagues want to interact with one another. Unfortunately, it appears that today’s demands may be outstripping yesterday’s frameworks.

For example, regulators have not yet clarified industry obligations around video meetings. Yet our industry, more than any other, understands the benefit of spotting the trend. The ability to record video isn’t new, however the flexibility to filter, cross-reference and quickly retrieve specific video records is what distinguishes a truly compliant firm. Many organizations have already begun instituting these protections; and, it’s quickly become an important component of a thorough process.

Corinna Mitchell, General Counsel
Gary Godshaw, Chief Revenue Officer

An Industry in Transition

The global pandemic changed the way we work, driving a heightened need for flexible communication tools

The truth is, the pandemic transformed all of us, almost overnight. In March 2020, traders who were globally transacting billions of trades were suddenly doing so from their kitchen tables; the entire industry weathered an abrupt transition. In that period, companies struggled to maintain business-as-usual in a world that had become anything but.

The one constant that carried our industry through that upheaval was communication. Maintaining workflows and servicing clients remotely was only possible because of technology. The ability to communicate became central to every firm’s operation—some would even say their very survival.

However, the first thing that changed in that hot moment was communication itself. The sudden “work-from-home” adjustment saw new tools and apps pressed into service. From WeChat and WhatsApp to personal texting and Zoom, various methods became the ad-hoc solution for many professionals.

Breakdown

Communication friction often underlies Compliance infractions

As industry-wide communication left the confines of the office, securities regulators became justifiably concerned. They rightfully questioned industry compliance around conversation monitoring and recordkeeping. Ultimately, hundreds of millions of dollars in fines were levied by both the Securities and Exchange Commission and the Commodity Futures Trading Commission. In the United Kingdom, the Financial Conduct Authority has imposed fines for misconduct which involved the use of WhatsApp and other social media platforms.

There is no question that the Finance industry needs to be compliant. Indeed, its people want to be compliant. However all this breaks down the moment professionals seek to serve their clients in a changing world.

In simple terms, when your most loyal customer texts you personally, you’re going to reply. If the firm’s most valued client calls your personal mobile, you’re going to answer. To be clear, none of this is an adequate excuse, but it must be acknowledged that such marginal moments are real. Unfortunately, they can trigger non-compliant repercussions.

The majority of Financial Services professionals aren’t trying to do nefarious things on their mobile phones—they just want to serve their clients with the least friction possible. It may not be acceptable to simply claim expedience, but the reality is that many of these infractions were driven by a desire to serve the best interests of the customer.

So how do we resolve this conundrum?

Interoperability & Security

As communication methods evolve, so must the Financial Services industry

The real solution is to meet people where they want to be met. In a multi-channel world, front office folks need the flexibility to interact with their clients in any and all of those channels. Not constraining your client will open the door to faster trust, stronger partnership and greater revenue.

As the world of work continues to transform, the Finance professional has new needs. Technology must perform more of this function now in a comprehensive, yet compliant manner. A comprehensive approach means seamless communication across both desktop and mobile. It means the ability to easily integrate bots, automations and third party tools clients are already using. Most importantly, this must all happen inside a secure environment seamlessly integrated with compliant recordkeeping requirements.

It may sound like fantasy, but it’s not. Symphony’s network of over half a million industry professionals already benefit from such flexibility, efficiency and yes, compliance. Many companies mistakenly believe that adaptation to this new demand is technically unobtainable or prohibitively expensive to implement. The reality is the technology to fully enable this is relatively simple and available today.

Everyone agrees that recordkeeping is an essential part of market integrity. It is a foundational component of any fair marketplace. Indeed, S.E.C. Chairman, Gary Gensler summarized the real issue at play: “As technology changes, it’s even more important that registrants ensure that their communications are appropriately recorded.”

The challenge arises from the “technology changes” that he highlights, yet where technology is a challenge it can also be a solution.

The right technology should offer:

  • Real-time surveillance by Compliance Officers
  • Retention, archival and export of communications
  • Expression filters to monitor keywords and terms
  • Disclaimers automatically inserted into conversations when required

Conclusion

At Symphony, we’ve worked with our customers to make possible something that never was before: the ability to meet clients exactly where they want to be met—and, to do so in a compliant manner. Regardless of a client’s communication channel preference, our customers can manage them all from a single platform.

The Financial Services industry is rapidly adapting to this new demand to serve clients, while fully satisfying regulators. This is what Symphony is enabling – solutions that reduce friction, facilitate seamless communication and avoid unintentional compliance violations in the effort to serve clients.

With Symphony, client service and compliant communication are not mutually exclusive; they harmoniously coexist through unified solutions on a single platform, here to help you.

In “Friction Not Fraud,” we explore the root causes of communication missteps and how with better tools, such errors can be avoided. Get the free PDF here.

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Interested in learning how Symphony can help your firm communicate compliantly?

See how you can maximize client engagement on popular messaging channels without sacrificing compliance.
Request a demo

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