Recording the communication between employees and customers is a vital need for all organizations, especially in the financial industry. Financial regulators around the world issue specific guidelines applicable for firms operating in their jurisdiction, for the safe and smooth operation of these firms. Maintaining records of all transactions done by the firm is one among many requirements made by the regulators.
The records of a business transaction also include the communication made by the employee of the firm and the customer. Hence, recording this communication and archiving it for a period specified by the regulator is very important.
The U.S. Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority, and National Futures Association govern financial firms in the U.S. Firms in Canada are governed by the Investment Industry Regulatory Organization of Canada and the Hong Kong Securities and Futures Commission (SFC) governs financial firms in Hong Kong.
While the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) is responsible for the safe operation of financial firms in Singapore, the Financial Conduct Authority (FCA) is the governing body for financial firms in the U.K.
FINRA regulations make it mandatory for business firms that use text messaging apps or chat services to communicate with their customers must ensure that they can capture and archive those communications as required. FINRA has specified general requirements for the preservation of books and records. The regulations make it important for business firms to monitor phone calls and record SMS messages that are used for business communications.
NFA expects its member firms to adopt supervisory procedures to monitor phone calls and record SMS messages for oversight purposes. It is a must to record electronic messages to explain members’ business activities. NFA regularly updates regulatory requirements for business firms. Violations are met with fines and suspensions for firms and individual members of the firms.
SEC Rule 17a-3 outlines requirements and standards of retention, management, and availability of data in the financial industry, with special provisions for business-related electronic communication. Business firms are mandated to capture, retain and make available when required all transactions and official business records. Non-compliance to the regulation would lead to disciplinary actions, civil liabilities, or penalties.
FCA regulations make it mandatory for business firms to follow text messaging compliance and to store communication records and retain them for at least five years and, if requested by FCA, for a period of up to seven years. It is thus imperative for financial firms to record SMS messages and monitor phone calls. FCA rules on archiving text messages and other forms of electronic communications must be complied with by all clients and all types of MiFID financial instruments.
According to various sections of the MAS Blue Book related to archiving mobile communications, business firms must record phone calls and all other conversations of Market Participants. MAS imposes penalties for non-compliance that include civil liabilities, fines, and sanctions.
The IIROC Rule 29.7 specifies the rules requiring firms to archive written business communications (advertisements, sales literature, and correspondence) and supervise employees. Under this rule, firms must retain records relating to their business activities, financial affairs, client transactions, and communication for five years from the date of creation. Additionally, all sales literature and related documents must be retained for two years from the date of production. Archived sales literature and correspondence must be readily available for inspection by the Association at any time.
The regulatory requirements given above, from different financial regulators worldwide show the importance of recording communication. Recording mobile communication alone is not enough anymore. Times have changed and communication has shifted from emails to several other channels. The increase in the use of smartphones has paved the way for newer communication channels. Messages sent via mobile instant messaging (IM) applications like WhatsApp, WeChat, Telegram, and Signal dominate all other traditional ways of communication.
Companies must be able to retain the recorded and deleted data for at least the period specified by the regulators. TeleMessage offers solutions like WhatsApp archiving and WeChat archiving (Signal archiving and Telegram archiving coming soon) for firms to be compliant while using popular mobile messaging applications.
Archiving the messages from mobile IM applications is not a simple task anymore. Most mobile chat applications offer an ephemeral messaging feature that allows users to delete sent messages within a specified time, or send messages that automatically deletes after a preset time. This makes things complicated for compliance professionals.
Hence, organizations must depend on a mobile archiving tool that is capable of capturing and retaining all messages, including the deleted ones.
There have been several incidents where the deletion of text messages has put individuals and organizations under pressure. The risk of deleted text messages usually arises during an eDiscovery request during a court case or the compliance audit by a regulator. If an organization is unable to capture and produce the entire communication history of its employees, then that organization is bound to face either legal proceedings or penalties for regulatory non-compliance.
Recorded communication has been relevant in several legal disputes. And individuals and organizations are bound to comply with courts if directed to submit the archived communication.
Even though many financial firms are aware of the regulations they are bound to follow, they are still unfamiliar with the solutions that can ensure regulatory compliance without the risks of conventional recording practices.
The Covid-19 pandemic has accelerated the use of mobile devices for business communication and the current trend does not suggest a turning back to the conventional communication practices. Organizations must adapt to this new normal and be compliant by recording and archiving their business communication so that regulatory compliance can be ensured and litigation risks can be mitigated.
About TeleMessage
TeleMessage captures and retains mobile content, including mobile SMS messages, voice calls, and WeChat and WhatsApp conversations from corporate or BYOD mobile phones to ensure compliance with various data protection regulations. The messages are securely and reliably retained within TeleMessage servers or forwarded to your choice of data storage vendor.
Our mobile archiving products securely record content from mobile carriers and mobile devices for various ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving solutions, you can always find the right tools or blend for your requirements:
- Network Archiver
- Enterprise Number Archiver
- Android Archiver
- WhatsApp Archiver
- WeChat Archiver
- Signal Archiver
- Telegram Archiver
TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website at www.telemessage.com to learn more about our mobile archiving products.
