WhatsApp Crackdown Raises Video Call Compliance Red Flags for Financial Institutions

Contact Us

Contact Us

[contact-form-7 404 "Not Found"]

Ever since the pandemic, businesses have been hooked to video conferencing technology.

While a surge in virtual meetings due to remote work and the fact that WhatsApp and other platforms, including Zoom can connect a global workforce has been seen as a mostly positive development for most industries, financial firms have found it to be a compliance nightmare.

Tightly regulated businesses, such as banks, stock brokers, and investment advisors have already been subjected to billion-dollar WhatsApp fines in recent years for failing to keep records of employee communication via texts and calls. Further, the regulators had found non-compliance going all the way up to senior executives. Making matters worse, emergent technology, like Artificial Intelligence (AI) has given rise to a new breed of financial fraud, including deep fake video calls from scammers pretending to be your banker that threatens to torch the reputation of these companies.

Against this backdrop, finance companies are scrambling to get on top of their video call compliance game before the regulators come knocking.

Frantic rush by financial institutions to bring order to the chaotic world of video conferencing 

Given that many financial firms have put in place comprehensive recordkeeping and retention measures to rein in non-compliant enterprise messaging, employees in many instances have turned to calls or video conferencing to avoid the scrutiny of their compliance officers.

A whole host of requirements, including MiFID II, FFIEC, FCA, FINRA, etc., that require call monitoring may soon end up including the need to retain copies of video chats.

Preemptively, many finance firms are screening their employees’ video messages and calls to not run afoul of regulators who have surprisingly kept up with technological advancements. Companies have gone as far as bringing on board risk consultants, law firms, and tech consultants to surveil employee video communication on platforms, like Zoom and alleviate risks, such as the leakage of customer data, non-archiving of the video messages, or non-compliance with what type of information can be shared online. Firms have also restricted some staff from messaging via their own devices entirely.

While FINRA Taping Rule 3170 mandates certain financial firms to record the audio of phone conversations, it is worth noting that missing out on capturing the video may lead to security and compliance issues because there’s no telling what is being passed on visually. Many of the video conferencing platforms also have functionalities, such as the ability to send emojis that could trigger potential customer complaints without ever showing up in the company’s system used to autonomously monitor texts.

The mission-critical nature of video call compliance for financial firms

The regulators have not yet explicitly said they intend to crack down on unauthorized and unsupervised video calls from employees at financial firms, but many in the industry are predicting it to be the natural progression of the authorities’ constant attempt to prevent market volatility and keep individual investors safe.

Being proactive in this regard can go a long way in helping financial companies stay ahead of their competition and regulators when it comes to regulatory compliance and protection from reputational damage and lawsuits.

In the long term, it can lead to tangible benefits, including:

Compliance across regulatory requirements

Financial firms can meet the recordkeeping requirements of SEC, FINRA, FCA, and MiFID II and further avoid leaking sensitive Personal Identifying Information (PII) and Payment Card Industry (PCI) information of customers, potentially saving them billions in fines.

Integration with existing processes

With a recordkeeping mechanism running in the background, firms don’t have to rely on employees to record their video communication or store it on their devices, where it can be altered or modified. Compliant WhatsApp recording or the retention of video calls from other platforms can take place in the background and get stored in the cloud securely in a tamper-proof manner if companies have in place a solution that can capture the communication over the network.

Capture and retention of all the communication that took place over the video call

Along with the visual component and the audio, companies will also be able to capture documents, messages, emojis, etc., sent over the instant messenger, as these applications are increasingly offering these functionalities.

Enforce access controls

Typically, video conferencing platforms allow the calls and meetings to be attended by a large number of people. Recorded sessions can even be shared around without any consideration of the sensitive material inside. So, monitoring employee communication across video platforms can be a potent way to ensure that key information is not compromised.

Stay compliant with varying retention period requirements

Financial firms often face retention period requirements that vary across different regulators and jurisdictions. Having a third-party system store your video calls allows the company to retain the communication for as long as needed in an easily accessible manner.

Emerging trends in video call compliance to watch out for

With financial scams orchestrated by miscreants with deep fake technology getting more prevalent over video calls, firms might be able to use the real-time recordings of their legitimate calls as proof of no wrongdoing on their part. So, the archive of recorded video calls and messages among employees and customers will serve as a “single source of truth”, protecting financial firms from penalties and business license cancelations.

Similarly, if the banking professionals or investment advisors receive a potentially fake video call, the compliance technology may be advanced enough to raise a red flag, leading to the fortification of customer information and company secrets.

Getting started with video call compliance

Crucially, companies need to train employees on appropriate video call and meeting conduct and put up clear guidelines on what information can be conveyed. Additionally, compliance teams need to clarify the penalties for not complying.

In case there is no official system in place to monitor video calls of employees, firms need to consider restricting some personnel from using that particular mode of communication, especially from their own devices over unsecured apps.

If there is a monitoring system in place, financial firms need specialized staff to review these meetings or employ technology, such as AI-powered risk assessment to ensure that the video conferencing follows both company and industry policy.

With video communication recording at your disposal, you can glean insights into which teams/ employees are most compliant, what steps can be taken to incentivize proper meeting etiquette, etc.

The recordings can further serve as a great way to train the next generation of financial advisors, bankers, compliance officers, HR, and IT teams at your firm on the best practices when it comes to video communication.

Conclusion

Undoubtedly, the increased use of video conferencing technology in financial institutions has raised compliance concerns. Firms, facing regulatory scrutiny, are proactively screening video calls to avoid potential violations and reputational damage. Compliance with recordkeeping requirements, such as SEC, FINRA, FCA, and MiFID II, becomes crucial, helping prevent leaks of sensitive information and saving billions in fines.

Adopting a comprehensive video call compliance strategy offers benefits like integration with existing processes, capturing and retaining all communication elements, enforcing access controls, and ensuring compliance with varying retention period requirements. Aside from that, training employees on conduct, setting clear guidelines, and implementing monitoring systems or AI-powered risk assessments are essential steps for financial institutions to ensure video call compliance.

To keep up with the latest trends in video call compliance, follow our blog. If you want expert consultation on how you can get started with archiving employee communication over WhatsApp, Microsoft Teams, Zoom, and more, contact us for a demo.

Skip to content