COVID-19: Banks must embrace home working compliance challenges

May 11th '20

The COVID-19 pandemic is changing the way the financial services industry operates, with most employees now working remotely. This has led to a boom in the use of collaboration tools such as Microsoft Teams, Slack and Zoom, which are being used to ensure continued connectivity and productivity for everyone from operational staff to traders.


The use of such tools does, however, present compliance challenges. A longstanding industry concern has been the ability to meet stringent compliance requirements regarding the monitoring and storing of e-communications data, particularly since each tool has its own unique messaging formats and capabilities. Before the outbreak, many banks chose to address this by banning, or limiting access to features within, collaboration tools. The realities of the current situation, however, suggest it may be time to change tack.


Monitoring and reporting requirements

Since the beginning of the outbreak, use of Zoom has increased by 300%. Microsoft Teams reported an increase of 12 million daily users just in the first two weeks of March. Many of these will be employees of financial services institutions. Many will have opted for free-use packages, enabling them to collaborate with their teams without the need for higher authorisation.


This makes it almost impossible for firms to meet their monitoring and reporting requirements. Even for those which have fully integrated collaboration tools, having such a vast number of employees using them outside of a more controlled office environment has made it substantially harder to meet compliance requirements.


In the meantime, regulations are still being enforced, and penalties for non-compliance imposed. The UK Financial Conduct Authority (FCA) has warned that despite the unprecedented nature of the coronavirus outbreak, it will not permit firms to forgo their communications compliance obligations.


To avoid falling foul of regulators while maintaining staff productivity, firms must make it easy for their employees to use collaboration tools and to work from home in a compliant manner. Firms need to be able to capture, monitor and supervise data across the wide array of platforms their employees are using. This data needs to be archived in its native format, and in a way that will be easy to search and recall during potential investigations at a later date.



Many firms are using legacy archiving systems that are simply unable to deal with such a complex situation, and firms must now invest in cutting-edge, scalable technologies that allow them to fully manage the risks and compliance challenges.


The current situation may prove to be something of a watershed. In heavily regulated industries, digital transformation often tends to be delayed due to compliance concerns. New technologies, new tools, and new ways of working can be side-lined to ensure regulatory requirements are met, but putting up barriers against innovation presents its own compliance challenges.


Several legal cases brought against banks in recent years have centred around the unregulated use of messaging tools, most notably WhatsApp. The onus is on companies to ensure that the communications tools used by their employees can be properly monitored and archived.


The use of instant messaging tools is ubiquitous, despite company bans. Bankers at two financial institutions spoke to the Financial Times last year, highlighting the fact that while employees are trained on how to use new media at work in accordance with compliance regulations, they are still able to install communications apps on their private phones.


Getting ahead of the curve

Financial services firms now have an opportunity to get ahead of the curve. Rather than outright or partial bans, they need to understand how their employees are communicating with one another, as well as how their customers want to communicate.


The financial services industry will be obliged to work remotely for the foreseeable future. Effective collaboration between employees, their teams and their clients will be vital. Communication platforms will be used widely, with or without employers’ consent. Investment in such tools, and in tailored compliance solutions to support their use, could well lead to innovations in the way firms work for years to come.


Originally published by Thomson Reuters © Thomson Reuters.


Join Shaun Hurst and Robert Cruz for a webinar, “Increased Use of Voice Communications: How to Protect Your Organization from Regulatory Risk” on May 28. 


Source: Smarsh

Author: Shaun Hurst


Shaun Hurst is the Technical Director for International Markets at Smarsh. He has over 18 years of experience solving complex IT challenges for Financial Services Institutions, and is a subject matter expert in topics like E-Discovery, Regulatory Requirements, Data Privacy and Cloud Computing.


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