Surveillance, Compliance and Communication
The way the world communicates has fundamentally changed as a result COVID and various associated quarantine protocols. There is perhaps no greater evidence of this shift than that seen in financial services. To maintain continuity of service to their clients, business units quickly adopted unified communications into their sales processes, trading operations and back office activities. Seemingly overnight, expensive lunches, in-person meetings and networking events were replaced by Microsoft Teams video calls.
This new stage of technological evolution will present compliance executives with the monumental task of incorporating video into their holistic surveillance capabilities.
The sudden adaptation created a significant challenge – how to allow for new communication channels while adhering to existing regulatory recording obligations, as there is no COVID defense for failure to supervise. In an impressive show of resilience, compliance teams all over the globe are successfully implementing omnichannel Teams recording programs to ensure effective operations, maintain market stability, and adhere to their various books and records obligations. As the industry continues acclimating to this new normal of doing business, another question emerges. Now that we can record video, what do we do with it?
Compliance procedures designed to surveil for conduct risk, market manipulation, and other malfeasance traditionally look at market data, trade data, voice and eComms (chat and email). The policies, analytics, and technology created around those data points are well-established, rigorously tested, and principally understood. Since widespread use of video communication is a new phenomenon, its incorporation into legacy policies and procedures is non-existent. This new stage of technological evolution will present compliance executives with the monumental task of incorporating video into their holistic surveillance capabilities. To make the mission a little less daunting, compliance executives should internally review the following three key considerations to incorporating video into their routine Compliance process.
A firm’s first step is a regulatory analysis, with a particular focus on developing a risk based approach and a clear strategy. Consider questions related to Books and Records requirements, jurisdictional differences, and consistency of application. Related, firms must then evaluate data privacy concerns. Consider questions related to presenting proper disclosure, and how data is evaluated for review. In Europe, it is paramount to define what parameters trigger a necessary, lawful basis to review recordings. Lastly, firms must examine challenges associated with data storage and capacity. Consider questions relating to where data centers are physically located, and how data deletion is controlled.
Video communication seems universally recognized as a necessary tool for doing business in "The New Normal." The ability to capture that video has been resolved, and now the mission begins to utilize video effectively for monitoring purposes. Using the starting points above, compliance teams can add a powerful new tool to their surveillance capabilities while maintaining the communication tool for business operations.
This article was also published in The Record magazine.
