LSEG’s latest webinar unpacks electronic communication surveillance in the age of WhatsApp. Learn about the importance of keeping pace with changing communication behaviours, and why financial services firms need to ensure compliance with evolving regulations in this dynamic space.
- LSEG’s latest webinar unpacks electronic communication surveillance in the age of WhatsApp.
- Learn about the importance of keeping pace with changing communication behaviours, and why financial services firms need to ensure compliance with evolving regulations in this dynamic space.
Smarter communication, new risks
As the ways in which we communicate change and evolve, new risks emerge. LSEG’s latest webinar unpacks this topic and explains why financial services organisations need to equip themselves with the right tools, procedures and governance solutions to proactively mitigate these emerging risks.
Vincenzo Dimase, Global Director, Sales Strategy and Execution, FX and Post Trade at LSEG outlines the key variables that are shaping developments in this space. Firstly, he highlights that the ways in which we communicate – both in the workplace and in our private lives – are completely different to how we communicated just five or ten years ago. Added to this, there is the core technology element that is enabling this change – for example, WhatsApp and other applications continue to grow in popularity. Additionally, there is the challenge of surveillance in this new landscape, including the role played by compliance and how best to remain compliant with all relevant regulations across jurisdictions. He further stresses the importance of the human factor and the role of individual conduct in this evolving space.
Unpacking the challenges
Against this backdrop, Rob Mason, Director of Regulatory Intelligence, Global Relay, a world leader in compliance messaging and message management, explains that communication has always been a challenge for financial services firms, but also points out that the move to hybrid working has added further layers of complexity.
He adds that “bring your own device” policies and the proliferation of available communication channels have brought the issue of communication surveillance to a pivotal moment.
Organisations need to be acutely aware of the landscape around compliant record-keeping, communication and surveillance, especially given the significant nature of recent regulatory fines.
Moreover, they need to find technology-enabled solutions that allow compliant business communications, but don’t overly restrict staff or operations.
Carroll Barry-Walsh from Barry-Walsh Associates consultancy further warns that if there is communication misbehaviour and this becomes public knowledge, the organisation could still face reputational damage, commenting that even a hefty fine can quickly become the least of the problems that needs to be managed.
Multicultural and multi-jurisdictional environments also affect communications, which can fairly easily be misinterpreted and lead to unintended fallout. Firms therefore need to understand how they will deal with such issues as they arise. Detailed examples as part of practical staff training can prove invaluable here.
A further challenge to consider is how compliance officers can enforce surveillance rules without breaching privacy rights, especially when faced with different privacy laws in different countries. Whilst such laws can present challenges, our panellists do point out that employees using work channels for private communications cannot expect such communications to remain completely private and furthermore, that compliance teams are generally only monitoring a sliver of total communications. They are not dipping into employees’ private lives but rather looking for specific issues, such as those relating to market conduct.
Types of risk
Our panellists go on to unpack some different types of risk that firms should look for. Such risks range from work-related misbehaviour – for example discussing prices with competitors – to personal misbehaviour that has nothing to do with work, but may still be recorded on work channels.
Personal misbehaviour could include financial misbehaviour, such as discussing tax misdemeanours or even drug use and can extend to sexual misbehaviour as well.
When such misbehaviour is recorded on work channels, it can lead to a range of knock-on challenges for firms – and could even be used by bad actors to blackmail the employees responsible for the misbehaviour.
Essentially the challenge facing compliance teams remains first and foremost to understand the full range of specific communications risks that apply to their own firm, and then to develop the right processes to address these risks. Furthermore, it is essential to communicate to staff that behaving professionally in the workplace is not just about ticking boxes. People need to think about what they are saying, who they are saying it to and how they are saying it. This gives the necessary substance to processes.
What steps can organisations take?
Our webinar moves on to outline exactly what it is that regulators are looking for in this rapidly changing landscape, with the speakers summing up two key requirements: firstly whether the firm in question assessed the risk correctly and secondly, whether the subsequent action taken was reasonable.
Surveillance solutions are already available to help firms establish the right processes and procedures to meet these expectations, but when choosing one, organisations should keep a few key factors in mind:
- A core issue to consider is data – specifically that all of the content within each monitored channel is captured completely and accurately, and that records include relevant metadata.
- Once an optimal level of data has been achieved, organisations need to prioritise what they analyse, based on their risk assessments.
- Above all, firms must act when necessary, since it is imperative to address risks once they become known. Compliance teams should be able to demonstrate intelligent thought and processes around such risks, even if they are still working on an ultimate solution.
Furthermore, it is important to check that any chosen solution is flexible enough to accommodate potential changes in the future, given a rapidly changing communications landscape.
A key takeaway from all our panellists is this: take steps now to know and manage your communications risk. If you are a regulated firm in financial services it doesn’t matter if you are big or small – this emerging risk affects all firms. It is simply a matter of time before surveillance solutions on all communications channels become standard practice.
Republication or redistribution of LSE Group content is prohibited without our prior written consent.
The content of this publication is for informational purposes only and has no legal effect, does not form part of any contract, does not, and does not seek to constitute advice of any nature and no reliance should be placed upon statements contained herein. Whilst reasonable efforts have been taken to ensure that the contents of this publication are accurate and reliable, LSE Group does not guarantee that this document is free from errors or omissions; therefore, you may not rely upon the content of this document under any circumstances and you should seek your own independent legal, investment, tax and other advice. Neither We nor our affiliates shall be liable for any errors, inaccuracies or delays in the publication or any other content, or for any actions taken by you in reliance thereon.
Copyright © 2023 London Stock Exchange Group. All rights reserved.
The content of this publication is provided by London Stock Exchange Group plc, its applicable group undertakings and/or its affiliates or licensors (the “LSE Group” or “We”) exclusively.
Neither We nor our affiliates guarantee the accuracy of or endorse the views or opinions given by any third party content provider, advertiser, sponsor or other user. We may link to, reference, or promote websites, applications and/or services from third parties. You agree that We are not responsible for, and do not control such non-LSE Group websites, applications or services.
The content of this publication is for informational purposes only. All information and data contained in this publication is obtained by LSE Group from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical error as well as other factors, however, such information and data are provided "as is" without warranty of any kind. You understand and agree that this publication does not, and does not seek to, constitute advice of any nature. You may not rely upon the content of this document under any circumstances and should seek your own independent legal, tax or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither We nor our affiliates shall be liable for any errors, inaccuracies or delays in the publication or any other content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the publication and its content is at your sole risk.
To the fullest extent permitted by applicable law, LSE Group, expressly disclaims any representation or warranties, express or implied, including, without limitation, any representations or warranties of performance, merchantability, fitness for a particular purpose, accuracy, completeness, reliability and non-infringement. LSE Group, its subsidiaries, its affiliates and their respective shareholders, directors, officers employees, agents, advertisers, content providers and licensors (collectively referred to as the “LSE Group Parties”) disclaim all responsibility for any loss, liability or damage of any kind resulting from or related to access, use or the unavailability of the publication (or any part of it); and none of the LSE Group Parties will be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, howsoever arising, even if any member of the LSE Group Parties are advised in advance of the possibility of such damages or could have foreseen any such damages arising or resulting from the use of, or inability to use, the information contained in the publication. For the avoidance of doubt, the LSE Group Parties shall have no liability for any losses, claims, demands, actions, proceedings, damages, costs or expenses arising out of, or in any way connected with, the information contained in this document.
LSE Group is the owner of various intellectual property rights ("IPR”), including but not limited to, numerous trademarks that are used to identify, advertise, and promote LSE Group products, services and activities. Nothing contained herein should be construed as granting any licence or right to use any of the trademarks or any other LSE Group IPR for any purpose whatsoever without the written permission or applicable licence terms.