The need to comply with many complex national and international regulatory requirements has often prevented the financial services industry from taking full advantage of cloud technology. However, cloud providers are continuing to strengthen their auditing
and data protection controls, resulting in cloud adoption becoming much more prevalent within the financial sector.
Regulatory agencies and bodies are now beginning to recognise the value and popularity of cloud services and, in some instances, are actively endorsing them. In November 2015, the Financial Conduct Authority (FCA) stated that there are “no reasons why cloud
technology should not be implemented should appropriate safeguards be in place”. This has given both public and private financial service companies the confidence to take advantage of cloud services. According to the FCA, cloud technology “can facilitate
entry and/or expansion, and increase the ability of financial services providers, overall, to renew their IT systems in a more efficient manner.”
Compliance in the cloud
The financial crash in 2007 resulted in stringent regulatory requirements from the FCA, Central Bank and MiFID, all aiming to improve communications and increase transparency in order to mitigate future risk. In fact, the FCA already requires anyone involved
in equity trading to record their mobile calls. MiFID II, due to come into effect in 2017, will expand this mandate to anyone involved in the trading process, including those providing trading advice, which will then need to be archived for five years. The
need for efficient, secure call archiving and recording is more substantial than ever.
These strict regulatory requirements mean that financial services companies need to take a closer look at technology infrastructure to meet them. Cloud technology, which was once rejected by the industry outright, may actually hold the key to reducing regulatory
risk. Used correctly, it can reduce exposure and provide quick reassurance that trades, and communications around trades, are compliant. The technology has the potential to make financial services more efficient, as well as encouraging innovation and improving
How the financial sector can utilise cloud technology
Many financial services organisations are beginning to realise that switching to cloud telephony solutions ensures they are fully compliant with industry regulations. Cloud technology not only guarantees seamless communications and flexibility to only archive
calls by relevant users, it also enables businesses to search and retrieve archived calls within seconds. If the company is looking for a particular issue or trend among the conversations, it enables them to word spot within archived calls. Cloud telephony
solutions can archive relevant calls securely in encrypted environments - which can reduce any security risk and avoid investment in expensive, less functional, on-premise archiving systems. Businesses can ensure they are safe in the knowledge that they can
meet new existing compliance regulations, while maintaining the confidentiality, integrity and availability of their financial services data.
Businesses can reduce communications cost by at least 30 percent and streamline their operations with the use of cloud technology. The cost savings is particularly dramatic when comparing the cost savings of using integrated cloud call archiving software
versus the usual on-premise hardware based call recording systems, especially as MiFID II draws closer. It’s more efficient to meet these requirements on a fixed, per user per month model. It has become cheaper to expand technology; whereas previously it took
a business several weeks and thousands of pounds to set up a new physical server, it now takes less time and money to do the same thing in the cloud. Ultimately, cloud technology ensures financial services companies are protecting and retaining the right data
so that it can be assessed for compliance reasons very quickly in a cost effective way, without endangering the security of the data itself.