3 Considerations for Managing Communications Compliance
January 24, 2023
How financial services firms can balance conflicting needs between where clients want to do business and what regulators require.
“The customer is always right.”
This influential phrase was popularized in the early 20th century and has shaped attitudes toward customer service and experience ever since. At its best, the idea guides businesses to serve their customers’ needs with understanding, empathy, and flexibility. But the belief that a customer’s desires, habits, and opinions are the ultimate trump card becomes dangerous when it comes to communications compliance.
Balancing the preferences of financial service clients for mobile communication with necessary compliance measures can be tricky. On the one hand, clients expect to be able to communicate with their financial service providers quickly and easily, using the mobile devices they carry with them at all times. On the other hand, financial service providers are required to comply with a wide range of regulations that mandate how they can communicate with clients, including strict rules around data security and confidentiality.
Financial institutions must find a way to meet their customers’ expectations while following the industry’s strict compliance laws. Banking and investment clients may find it easier to use mobile messaging apps like WhatsApp or iMessage to conduct business; however, it’s up to financial institutions to set boundaries to avoid unnecessary risk. Firms can strengthen their client partnerships by striking a balance between thoughtful service and the right policies and technology to prevent inadvertent rule-breaking.
1. Manage the shifting digital landscape
One way to strike a balance between these competing priorities is to focus on providing secure and compliant mobile communication options that meet the needs of both clients and regulatory authorities. Those efforts include implementing two-factor authentication for all mobile communication, encryption to protect sensitive data, and requiring clients to agree to specific terms and conditions before using mobile communication channels.
Another important consideration is being transparent and upfront about the security measures in place for mobile communication. This can build trust with clients and demonstrate that their financial service provider is taking their security and compliance seriously.
At the same time, it is also essential to be flexible and responsive to clients’ changing needs. For example, with recent layoffs, budget cuts, and the looming threat of a recession, there’s more pressure on business leaders and employees to get work done with fewer resources. Fewer resources can mean lapses in judgment when it comes to sending messages and remembering the rules. That’s why it’s crucial to have clear policies and compliance technology to help detect risky behavior while still supporting modern digital business practices.
2. Find the right compliance technology
Compliance leaders can turn to technology to manage the changing business landscape to ensure their programs are effective. Looking at a full communications compliance suite is an excellent place to start. Companies need to ensure that there is technology in place to:
Prevent non-compliant communications
Perform risk scoring and communications reviews to help resource-constrained compliance teams run effectively and efficiently
Archive messages in a system that makes e-Discovery simple to be prepared for potential regulatory inquiries
The right compliance technology can also help track and analyze internal and client-facing communications in real time. While some compliance technologies can’t track mobile messages sent through WhatsApp, iMessage, and other unauthorized apps, they can help effectively monitor, risk score, and support appropriate digital communications.
Regulators are also using investigations into unauthorized channels as an entry point for wider evaluations of overall compliance records and policies. It’s critical for companies to have robust compliance programs in place not just to prevent issues like data breaches or insider trading but to demonstrate a commitment to compliance that will help them avoid unnecessary exposure or risk in an investigation. While these measures alone won’t offer protection from penalties if clients and employees use mobile communications platforms like WhatsApp without the right tracking and archiving, it offers a strong starting point.
3. Conduct a gap analysis
Another way companies can identify communications risks both internally and externally is by conducting a gap analysis. This analysis can identify blind spots in compliance programs and find areas for improvement. If clients and employees are using apps like WhatsApp, steps can be taken to either redirect to more appropriate channels or expand reporting and archiving procedures to avoid regulatory infractions.
Balancing the preferences of financial service clients for mobile communication with the necessary compliance measures requires a thoughtful and strategic approach. Financial service providers can build trust while protecting themselves from risk by providing secure and compliant mobile communication options, staying transparent about security measures, and being flexible and responsive to changing client needs.
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