Mobile monitoring

mobile-monitoring

Since 2008 many financial services firms have been forced to record and store the deskphone conversations that employees conduct with clients, to meet their regulatory compliance requirements.

“Inevitably any firm seeking to adopt mobile call recording solutions faces security challenges in protecting their call recordings and other corportate data. ”

The Financial Services Authority (FSA) reasoned that recording relevant calls would help resolve disputes, improve regulatory adherence and avoid market abuse. As a result, equities, bond and derivatives trading firms are currently obliged to retain call recordings made from a fixed-line phone for at least six months. 

Initially, the FSA exempted conversations held on mobile devices, on the basis that the inherent technical challenges and the cost of implementing such an undertaking hampered its viability.

But now the FSA is reviewing this exemption, given the availability of new systems and technologies which make it easier for firms to capture and store mobile calls.  A Consultation Paper proposing the removal of the exemption was published in March 2010, and when the consultation period ends in June this year, many in the industry expect the FSA to announce that the exemption will be removed.  After all, the benefits of having taped evidence of all calls to help tackle market abuse and deliver greater price efficiency are clear and compelling.

Removing the exemption

The FSA’s reconsideration comes as no surprise. The use of mobile phones continues to grow throughout the world, with the smartphone market increasing at an even faster rate (based on Q1 2010 figures, IDC stated the smartphone market grew 56.7% year-on-year - May 2010). Therefore it is short-sighted to think that organisations in the financial sector should not utilise and benefit from technology that makes employees more productive and efficient when on the move.  Lifting the exemption would enable firms to empower their employees to make decisions and transactions wherever they are using their smartphone, so avoiding current workarounds or missed opportunities.  Many firms have even banned the use of mobile phones for transactional conversations completely, whether on personal or company-owned devices. While that action has underwritten complete transparency and propriety for those firms, it has also limited their ability to capitalise on the productivity and profitability opportunities that mobile working offers, and has potentially limited the quality of service they are able to offer their clients.

Technology advances

Since the publication of the initial regulations, the technology and cost barriers have been quietly coming down. The Consultation Paper acknowledges that now there is technology available that makes mobile call recording an achievable reality. It is within the financial and operational scope of regulated firms to reliably and securely capture mobile records and store them securely offsite.

Firms who are already using the BlackBerry platform, for example, can quite straightforwardly integrate off-the-shelf products from Independent Software Vendors which allows them to securely record and store relevant client phone calls without significant end-user effort. These products generally integrate seamlessly and straightforwardly with firms’ existing BlackBerry infrastructure, and also with fixed line telephony infrastructures, meaning that the recording and management of mobile phone calls becomes a part of an already familiar system. 

Inherent security

Inevitably any firm seeking to adopt mobile call recording solutions faces security challenges in protecting their call recordings and other corporate data. Again, firms who use the BlackBerry platform to achieve this have an advantage – the security architecture inherent in the BlackBerry platform can be leveraged to ensure complete data security, ensuring that all data is encrypted end-to-end, and that recordings themselves are never stored on the smartphone. Encrypted call recordings that are saved as data files are sent over-the-air to a company’s storage facility.

What’s more, the powerful administrative control which the BlackBerry platform delivers can ensure that call recording systems can’t be bypassed by the end user on BlackBerry smartphones. This means that firms can mobilise confident that any action and call taken by their staff on a company-owned BlackBerry smartphone can be safely and reliably recorded, wirelessly transmitted somewhere else and stored securely and efficiently for later retrieval.

Raising Awareness

Sadly, many financial services firms remain unaware of the increasing affordability and feasibility of mobile call recording solutions, and have reacted defensively to the FSA’s Consultation Paper.

However forward –thinking financial services companies are now looking for ways to make a virtue out of this impending necessity. Many have realised that there is more to mobility than simply another regulatory burden, especially those who already use BlackBerry smartphones for corporate email and to extend corporate applications to mobile users, who are realising that their BlackBerry investment can be leveraged to empower their staff to trade and manage client accounts much more effectively, while remaining completely compliant and transparent.

Even after a tightening of the regulatory belt, firms can still enjoy and profit from the benefits of mobile working, without having to change working practices significantly. As the consultation paper only proposes the removal of an exemption, not a new regulation, most firms will already be aware of what they do and don’t need to record, so there is little or no staff education needed.  And, beyond the scope of the regulatory environment, firms who track every communication their staff make, whether desk-based or mobile, are in a much stronger position to defend themselves against claims, misunderstandings and mistakes.

For clients too, the mobility scenario has many advantages. A broker who is mobile is a broker who is approachable. If a dealer is unable to take a call because he’s out of the office, then he’s no good until he can get back to his desk. But a broker who can compliantly take instruction, wherever he or she happens to be when the call comes in, is a broker who can provide better client service and more business for the firm.