“It has become clear that simply telling staff not to use non-approved systems doesn’t work. There are some ways to bring the communications into firms’ records. . ., but such solutions are clunky and easy to get wrong..”
— Matthew Nunan, Former Head of Wholesale Enforcement at the FCA and Partner at Gibson Dunn
We’ve seen in recent headlines that major banking institutions broke regulatory rules and received heavy fines for conducting business on unauthorized communications channels. So what is the right way to navigate communication channels in today’s increasingly digital world, and how can organizations avoid a similar fate? This week, we explore how to remain compliant in business communications.
Asset Managers on Alert After ‘WhatsApp’ Crackdown on Banks
Asset managers tighten controls on personal communication tools such as WhatsApp as they join banks to ensure employees play by the rules when they do business with clients remotely. Regulators had already clamped down on unauthorized messaging tools to discuss potentially market-moving matters. Still, the issue gathered urgency when the pandemic forced more finance staff to work from home in 2020. As a result, industry sources expect authorities to cast their nets wider across the finance industry and even into government.
The Right Way for Banks to Use Texting
Texting is a fast, effective way for businesses to reach customers. According to research from Gartner, ninety percent of all people read texts within three minutes of receiving them, and SMS boasts a 98 percent open rate, much higher than email. The private nature of SMS allows banks to send messages to customers that are both discrete and convenient. However, organizations must follow regulations when using SMS, and appropriate systems must be in place to keep all texting and other communication recorded. Learn several tactics that bank marketers should keep in mind to offer convenience and information to customers with business SMS—all while staying compliant.
Banks Need WhatsApp Alternative Fast to Dodge Hefty Fines, Warns Former FCA Official
Sixteen financial firms received fines when it was discovered that staff discussed deals and trades on private apps. As a result, financial firms in the UK brace for regulators to crack down on encrypted messaging channels. A former official at FCA, Matthew Nunan, indicated that firms have a dwindling arsenal of tools to curb the use of encrypted messaging apps. There are signs that banks are beginning to look towards digital messaging platforms as the remedy to the issue. Surveillance technology could provide an alternative for firms to police suspicious behavior and stamp out private messaging chats.
Why the Banking Industry Needs to Proactively Identify Unapproved Communications Channels
Conducting business on unapproved communications channels is a problem that will continue growing with ongoing remote work and new ways to communicate digitally emerging frequently. When businesses get caught, the associated costs are high. The best way to ensure compliance with communications policies is to train employees on where they can communicate and the consequences of working outside those bounds.