With the rise of digital communication, especially during the COVID-19 pandemic, the way businesses communicate has undergone a significant transformation. One such change has been the increased use of video calls, which, while convenient, has brought forth new challenges in terms of compliance and surveillance.
Key Highlights:
- The US Securities and Exchange Commission (SEC) has been focusing on business-related text messages over unauthorized platforms like WhatsApp.
- These messages went untracked and unrecorded by regulated firms, especially during the pandemic lockdowns.
- Financial firms might now need to screen staff video calls for potential rule-breaking.
- Concerns arise as regulators might scrutinize these calls for compliance breaches.
- Finance firms are seeking technology specialists and risk consultants to ensure video calls are monitored and retained as per requirements.
Increased Surveillance on Digital Communication:
The SEC’s focus on business-related text messages, especially over platforms like WhatsApp, has been a significant concern for many financial firms. These messages, which were largely untracked and unrecorded, especially during the pandemic lockdowns, have raised alarms about potential rule-breaking and non-compliance.
The Shift to Video Calls:
With text messages and emails under increased surveillance, the spotlight has now shifted to video calls. There’s a growing concern among financial firms that they might have to screen these calls for potential rule violations. This is especially pertinent as many employees have been working from home, and video calls have become a primary mode of communication.
The Role of Technology in Compliance:
To address these concerns, finance firms are now turning to technology specialists, law firms, and risk consultants. The goal is to ensure that video calls are monitored, retained, and compliant with record-keeping requirements. There’s also a concern that these calls could be used to share non-public information illegitimately.
Regulatory Stance on Video Calls:
While video calls are currently seen as proxies for face-to-face meetings and have little to no formal record-keeping obligations, this might change soon. Regulatory bodies are likely to assess the potential for compliance failures over video calls. If client calls are made over platforms like Microsoft Teams, regulators would expect these to be recorded and retained.
The Way Forward:
The rapid evolution in the way businesses operate and communicate necessitates a reevaluation of compliance mechanisms. Financial institutions need to be proactive in understanding and mitigating the new risks that come with digital communication.
Summary:
The clampdown on platforms like WhatsApp has highlighted the potential threats and challenges that financial firms face in terms of compliance. With the shift to video calls, especially during the pandemic, there’s a growing need for firms to ensure that these calls are monitored and recorded. As regulators turn their attention to this mode of communication, financial institutions must leverage technology and expert advice to stay compliant and mitigate risks.
