Guest Contributor: Curtis Nash, CEO, Compliant Phones
This Monday (14th November), an important regulatory and operational milestone for firms operating in the capital markets will be reached in the UK. The Financial Services Authority (FSA) finally mandates the recording of transaction-related communications to and from staff mobiles.
Despite criticism from banks that the regulation is an unnecessary burden that requires the deployment of relatively immature technology, the FSA has been steadfast in their resolve. Other key financial centres are now following suit, most notably the US.
Under direction from the Dodd Frank Regulatory Reform Bill passed by the Senate last year, the Commodities Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) will introduce voice record-keeping rules next year. Initially targeted at swap, commodities and derivatives dealers, it’s a safe bet to assume these will extend to equity markets.
Closer to home, last month’s publication of “MiFID II” proposed wording—the latest version of the Market in Financial Instruments Directive and in many ways Europe’s answer to Dodd-Frank—confirmed the European Commission’s intention to mandate voice and electronic record keeping across all member states.
With recording here to stay, the question on everyone’s lips now is: how easy will it be to work and manage? In the absence of wires to which to connect, mobile recording is deceptively complex. As a result, a lot of attention has been focused on how to capture mobile calls (and voicemail and text) reliably wherever a user happens to be and without impinging on their communication experience.
This is only half the battle. In an age of heavy-touch regulatory supervision and increasingly damaging persistent rogue trading, the ability to store, find and manage the additional data stream efficiently and responsively is becoming a business-critical requirement—particularly given five and three-year minimum retention periods being proposed by the US and the EU.
But in regulated markets, it is invariably the supervisors that control the pace of innovation. Arguments over regulatory necessity will soon fade away to be replaced by talk of business benefits in this fast developing technology area.
Investment banking has, until now, been a desk-based pursuit. Freed from the shackles of the office, compliant mobile working offers significant benefits, particularly given the 24×7 global nature of investment banking
In addition, other derived benefits are emerging. For example, this has offered many firms the catalyst they need to adopt secure cloud-based recording, archive and analytics systems that can transform the cost and flexibility of IT infrastructure at a time when their businesses are finding it harder than ever to deliver top-line growth.
Yet, as any CIO knows, picking technology winners can be no different to picking stocks. Looking at fundamentals, taking a long view, protecting your short-term position—the same principles often apply. And in a febrile, fast-changing market, this can be just as challenging. The overall message to the financial services community is clear – take mobile recording seriously and do not cut corners.