In today’s dynamic business landscape, electronic communication applications such as Slack, Zoom, and WhatsApp have become integral tools for fostering collaboration and communication among employees and customers. However, this transition to digital communication platforms presents a significant shift in how industries, especially those regulated by government agencies like the Securities and Exchange Commission (SEC), approach communication.
Historically, regulated sectors like banking and finance have been cautious about adopting communication apps beyond monitored channels for proper data storage and archiving. In the past, it was relatively straightforward to archive communication data when conversations were predominantly conducted through business phones and email. But in the modern age, the proliferation of communication apps across businesses has made archiving and monitoring a substantial and costly challenge.
While these apps are accessible and widely used by most employees, they also bring challenges related to undesirable behavior, including money laundering, insider trading, data leaks, and workplace harassment. Such risks can have severe consequences, including legal repercussions and financial penalties. Even the world’s major banks have faced substantial fines, and experienced executives have been terminated for merely using unapproved communication channels, regardless of their communication’s legality.
So, what can global banking and finance executives do to ensure effective communication while meeting evolving regulatory requirements on a global scale?
A Siloed Approach No Longer Works
Global regulators have emphasized the importance of record-keeping and archiving for communication channels. However, applying the once-siloed approach across all communication channels has become increasingly challenging. In the past, legacy vendors could offer archiving services for email and web surveillance separately from phone surveillance. But in today’s landscape, the multitude of electronic communication channels necessitates workplace intelligence and monitoring solutions that proactively oversee all communication methods. This includes WhatsApp messages, Zoom video calls, traditional phone calls, and emails. Beyond surveillance, modern electronic communication tools should alert organizations to reduce regulatory, reputational, and information risk.
Despite Historic Hesitancy, Shift to the Cloud
Financial institutions traditionally shied away from moving to the cloud. However, the work-from-home era forced banks to consider new solutions. Previously, banks relied on on-premise data archives for compliance. But the surge in data from electronic communication channels posed challenges for legacy archiving solutions to keep up with demand. As employees shifted to electronic channels such as WhatsApp and Slack, banks found it challenging to monitor for market abuse, especially as global regulators scrutinized these platforms.
Traditional on-premise data management applications have made it difficult for banks to meet regulatory requirements and adequately archive the vast amount of organizational data from these communication channels. On-premise solutions also incur higher long-term costs due to the need for strict hardware, IT staff, software integrations, and other expenses.
Furthermore, on-premise solutions hinder the adoption of emerging technologies like machine learning and artificial intelligence. The financial industry is increasingly integrating these advanced technologies, making it essential for banks to quickly and seamlessly adopt them through cloud-based solutions.
What’s the Solution?
To enhance productivity and security, banks and financial institutions should streamline and standardize their electronic communication channels to meet their specific needs. Overuse of inefficient or unapproved applications can lead to frustration, reduced collaboration, and security vulnerabilities. Organizations must identify the most suitable electronic communication tools for their operations and employees while eliminating unnecessary apps to avoid application sprawl.
Once communication channels are simplified, banks should invest in monitoring and archiving solutions that prioritize data privacy and mitigate business risks. Nefarious activity often leaves traces in electronic communications, making it vital for organizations to choose deep tech solutions that cater to their specific archiving, transcription, discovery, and surveillance needs.