The deadline for MiFID II might be delayed, but financial organisations should be wary of putting off their plans to reinforce archiving of client communications. With every piece of litigation, the pressure on the preservation of communications data grows,
but by tackling the issue and addressing some of the key areas now, firms will be in a better position to defend themselves in the future.
Define the channels to be preserved
MiFID II clearly states that “all reasonable steps must be made” to capture phone and electronic records - not just email. But whether it’s VoIP, Skype, LinkedIn or other collaboration tools, each have their own idiosyncrasies when it comes to archiving.
Deciding now which channels are approved based on the need in the workplace and challenges in preservation, will save time wasted in reactive measures at a later date.
Give data a permanent home
Every time data changes hands it increases the risk of introducing a point of failure. Take steps to ensure that the protection of data during litigation goes beyond simple reliance on chain-of-custody documents. Consider maintaining a full copy of data
in place or using legal hold capabilities with archiving technologies to ensure an undisputed copy of data remains available.
Filter data for faster retrieval
Preserving data needs to be intelligently handled if you want to use it to your advantage. Systems that enable a tamper-proof archive of data filtered by various criterion such as custodian, keyword, date range and communication channel, help to reduce the
amount of data required to be stored and lower processing costs. In addition, filtering makes it much faster to find and retrieve evidence should a transaction be disputed.
While automated archiving is an excellent way to ensure nothing is missed, don’t ignore the danger of human oversight. One of Apple and Samsung’s “she said, he said” battles over patents faltered when it became apparent that Samsung had forgotten
to deactivate a biweekly removal of data from its email servers. Visibility into archive systems will enable legal teams to ensure the status of the data being preserved and provide them with the means to attest to those capabilities.
Conversations today use any number of different channels. A customer complaint on Twitter might continue over email. Defining the terms of a trade can be faster on chat than using the original email initialising the deal. There are all kinds of legitimate
reasons for switching to the most appropriate channel during a conversation. And a few dubious ones too.
Knowing who joined a conversation when and over what channel can be a nightmare to reconstruct six days after the fact, let alone six months. An archive that is going to save you time and money in litigation, as well as highlight any rogue trades, needs
to deliver conversations in context as they switch between different channels and users.
MiFID II might be why firms are taking a closer look at how conversations are preserved within an organisation, but shoring up your defences against litigation is a more compelling reason for doing it now than waiting for compliance to be enforced.