07 October 2015

Chris Pickles

Chris Pickles - Consultant

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Mobile phones and King Canute

16 January 2013  |  2495 views  |  0

Because Dodd-Frank and MiFID are getting most attention on the compliance front from the financial markets community, that doesn’t mean that every country is doing what the USA and EU are doing or planning.  One example is around the recording of dealings with customers.

While the retail banking and payments sectors are looking at how they can restructure themselves to allow for and take advantage of the worldwide adoption of the mobile phone, financial market regulators are not necessarily taking a similar “look to the future” approach. 

In some countries, for example in the Asia/Pacific region, very few investment firms record any of the conversations with their customers, and that hasn’t been a regulatory requirement either.  Some regulators in the region have started to address that area.  But despite the massive use of mobile phones across the region generally, most regulators have not yet addressed what happens about mobile phone conversations and instant messaging with clients – other than perhaps to ban the use of that technology in the trading area of investment firm.

Regulations hurt firms least where they are already applying “industry best practice” and can show it.  Regulations are most effective when they take into account and allow for the current market situation and everyday use of technology.  About 1,000 years ago King Canute ruled England and thought that he was so powerful that he could sit at the edge of the sea and make the tide go back.  King Canute was proved wrong and got his feet wet.  Regulators that decide to police markets by banning new waves of technology that even children use may find themselves looking similarly damp, and this will impact the quality of their national markets.

TagsTrade executionRisk & regulation

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job title Consultant
location England
member since 2009
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I help organisations that work in the financial sector around the world to understand better how the sector works, how regulations impact the business operations of financial institutions, and how to...

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