No-Texting Policy is Not a FINRA Defense

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FINRA regulations concerning mobile communications and text messaging have made it clear that financial institutions under its authority must have a system in place to retain all business-related messages sent by employees from any platform on their mobile devices.

In its April 2017 Regulatory Notice, FINRA states that “every firm that intends to communicate, or permits its associated persons to communicate, with regard to its business through a text messaging app or chat service must first ensure that it can retain records of those communications…”

While many financial organizations have willfully complied with all the recordkeeping requirements of FINRA, many companies still choose to take a different route- entirely prohibiting their employees from using text messaging and chat apps to conduct business.

But is a no-texting policy enough to keep financial organizations compliant with FINRA’s text message archiving regulations? Experts don’t think so.

FINRA’s Take on No-Texting Policy

Many financial firms ban their financial advisors from using messaging for work purposes not only to protect their productivity but also to circumvent the need for a comprehensive approved FINRA text message archiving system.

However, many of these organizations do not realize that FINRA does not care if a company has a no-texting policy or not. If they find an employee has used text messaging with a customer, a hefty FINRA fine will be imposed.

Furthermore, FINRA is well aware that today’s workplace is increasingly becoming more mobile, primarily because of the rise of a younger generation workforce. FINRA auditors, in fact, will check the mobile phones of your X/Y generation employees, to make sure that the no-texting policy is not being breached if there is one in place.

Why Should You Not Prohibit Texting at Work?

It’s completely understandable for you to fear that texting at work will reduce your company’s productivity, and in some cases, it truly does. However, it is also important to consider how your employees will react if you choose to ban the use of text messaging to communicate business-related information to their colleagues and to your customers.

If you decide to establish a no-texting policy at work, then you will:

  • Struggle to communicate with younger customers and employees, since texting is the preferred method of communication by younger generations of employees and customers.
  • Also, the transfer of wealth – as much as $30 trillion in assets – has now started from aging Baby Boomers to younger Gen X’ers and Millennials heirs, so neglecting their preference and treating them as less lucrative customers can have a huge impact on your bottom-line sooner than you think.
  • Be less inefficient, and less proactive as your employees will need to spend more time setting up meetings or coordinating activities via a phone/call email, which could be easily done over text.
  • Be less competitive, as 70% of organizations are already using SMS/text messaging for official business.

In conclusion, a no-texting policy is clearly a poor strategy – both business-wise and compliance-wise. Banning text messaging for work to avoid the need for an archiving system will most likely lead to compliance issues especially now that FINRA is becoming more vigilant towards the retention of text messages.

Likewise, implement such a policy and risks harming employee morale and productivity in the process- your business is more likely to suffer than to benefit from it in the long run.

With TeleMessage, financial organizations can easily comply with the FINRA regulatory guidance on text messages.  The TeleMessage Mobile Archiver fully addresses the enterprise regulatory and compliance requirements: to mitigate risk and to capture and retain SMS/text, MMS, and calls of employees.

TeleMessage integrates with leading archiving and compliance vendors, enabling clients to store mobile text messages in the same archive where they store employees’ emails and documents. TeleMessage is listed in the FINRA Compliance Vendor Directory, and assists financial companies in meeting their compliance and security requirements.

Contact us today to learn more how our mobile archiving solutions can help your organization maintain compliance with FINRA.

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