Prior to the implementation of Markets in Financial Instruments Directive (MiFID II), many UK financial firms allowed their employees to use their own devices for business purposes, the most common being sending messages on instant messaging apps such as WhatsApp.
However, the number of financial firms having such a practice could have diminished as the Financial Conduct Authority (FCA) released their final version of the EU MiFID Directive concerning the use of personal devices at work, and now mandates that all UK financial firms with employee mobile BYOD policies to record such devices.
The implementation of MIFID II was intended to enforce the prohibition of the bring-your-own-device (BYOD) approach within investment firms only, but the FCA chose to “gold-plate” it, i.e., going above and beyond what the directive intends rather than contradicting it.
This unexpected ruling raised a question about how financial organizations will manage their employee communications, especially WhatsApp FCA messages. With instant messaging increasingly becoming the norm in the financial services sector, the FCA’s blanket ban on BYOD devices that firms are not able to capture and record exposed numerous UK financial organizations to severe compliance risk.
FCA: BYOD Must Be Archived: What it Really Means?
Consumer-grade encrypted messaging apps, often called “ghost” apps such as WhatsApp have become increasingly prevalent in the financial sector. And while these apps helped financial companies communicate with their clients more efficiently and effectively, they have also been used in ways that violated the market protection and transparency standards of the FCA, such as the ex-Jeffries bankercase in 2017.
The non-compliant usage of WhatsApp on a personal device may have been what caused the FCA to change the original MiFID II regulation regarding BYOD policies. However, this final ruling doesn’t mean that financial firms are no longer allowed to use WhatsApp in their day-to-day operations.
The FCA handbook rule SYSC 10A.1 states:
“A firm must take all reasonable steps to prevent an employee or contractor from making, sending, or receiving relevant telephone conversations and electronic communications on privately owned equipment which the firm is unable to record or copy.”
While the rule states that all financial firms must prevent their employees from using their own devices for business-related communication, the last clause “which the firm is unable to record or copy” implies that companies which have the capability to capture and record text messages sent and received on apps installed either on BYOD or company-issued devices can still allow their employees to use WhatsApp.
What Should UK Firms Do?
Based on the final ruling of the FCA, it is clear by now that the only way for UK financial firms to stay compliant is to have a solution in place that will capture and record WhatsApp FCA messages securely.
While the use of non-enterprise grade communication platforms like WhatsApp itself at work is rarely malicious, compliance risks start to manifest when fail to record conversations that include client or work-related information. By using a business text message archiving solution that can capture and record all messages including text, multimedia communication,and files sent and received on WhatsApp, employees can remain productive at their work, clients will be able to reach the firm much easier, and financial firms can stay compliant with archiving regulations of the FCA and avoid the cost of heavy fines and penalties.
TeleMessage’s WhatsApp Archiver is a unique platform tailor-made to solve compliance and regulation issues by allowing UK firms to capture and archive WhatsApp FCA messages. This platform works exactly like the standard WhatsApp application, ensuring that employees will still be able to send work-related communications easily and quickly.
The benefits of using WhatsApp Archiver in your business include:
- Archive all WhatsApp communications
- Use WhatsApp to communicate with customers, employees, and stakeholders
- Search, track and retrieve WhatsApp messages in the corporate archive
- Deposit WhatsApp messages with any email archiving vendor
- Full administration and reporting
The TeleMessage WhatsApp Archiver is the latest addition to our mobile archiving products that securely capture content from mobile carriers and mobile devices for a variety of ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving methods, you can always find the right tools or blend for your requirements:
TeleMessage offers cross-carrier and international mobile text and calls archiving for corporate and BYOD phones. Contact us today to try our mobile archiving products.
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