Financial brokers communicate with clients through multiple channels. To comply with regulations you must monitor and record all relevant communication across all channels.
This article is part 3 of a 6-section whitepaper on ensuring proactive compliance in an increasingly rigid regulatory environment. Fill out your details below to download the complete whitepaper.
This article is part 3 of a 6-section whitepaper on ensuring proactive compliance in an increasingly rigid regulatory environment.
Imagine the following scenario: A finance agency arranges an online meeting with 100 participants and presents an investment opportunity. In the following days, interested parties contact the broker via phone to ask for more information.
The broker sends information to a prospect via email and the interested party replies in a short SMS that they want to know more about the risk surrounding the investment. A consultant in the company calls the customer and arranges a meeting.
After making contact numerous times, and across multiple communication channels, the two parties enter an agreement and the transaction is completed. The question now is: Is there a complete audit trail available?
Compliance Officers require a complete overview
This scenario is a typical example of a modern customer journey. The time when all communication took place via telephone or fax is long gone, and today brokers and consultants often communicate with the customer through a wide array of channels – from mobile phones and email to chat services and social media.
Regulatory directives, such as MiFID II, require you to have a complete overview of all customer communication, across all channels, and this task generally falls to the compliance department. Not only do they need to know how brokers communicate with customers, but they must also ensure compliance with all rules and regulations.
Solving a challenging task
Two important aspects of an efficient and proactive compliance approach are clear routines and guidelines for communication within the company, and a systematic set-up of permitted channels that grant compliance officers complete control.
For this to be achieved, it is crucial to have one central system for recording and storing data that makes it easy to record all communication in all permitted channels. This system must also provide compliance officers with access to all relevant information, as well as a complete audit trail for each customer relationship.
3 keys to efficient and proactive compliance:
- Ensure good information flow
A good information flow within the company ensures that all employees who are in direct contact with customers during the sales journey are aware of the guidelines and permitted communication channels. Compliance officers must verify that all brokers and consultants adhere to these guidelines.
- Avoid information surplus
Although financial agencies are required to store relevant information regarding a potential transaction, there is also plenty of information that should not be stored. Brokers will likely use the same channels for professional and private communication, highlighting the importance of applicable whitelisting functions and solid guidelines to determine what information to store, and what to omit.
- Use risk indicators for added security
One of the risks of whitelisting is brokers tagging professional calls as private, allowing them to communicate without being recorded. To minimize this risk the recording system should enable the use of risk indicators, such as setting up alerts for additions or changes in numbers or IDs during calls. This adds an extra layer of security and prevents potentially costly regulatory breaches.
Questions to reflect on:
- Are the brokers and consultants within your company using any communications channels that are not currently being monitored?
- Do you have solid routines and systems to avoid storing private calls and surplus information?