The UK’s fintech industry is booming. In 2015, the sector generated £6.6 billion in revenue and that figure continues to increase. Considered the global leader, fintech experts from the UK are being whisked away to New York and Hong Kong – other financial powerhouses – in order to invigorate their respective industries.

This new array of exciting start-ups have undoubtedly been helped by the cloud, a technology that is still yet to be fully embraced by the wider financial services industry. Indeed, traditionally governed by strict regulations, financial services organisations have tended to shy away from the technology; unsure if cloud service providers’ (CSP) offerings would leave them vulnerable to non-compliance fines.

Changing perceptions of cloud technology

However, attitudes are changing. Regulators are finally beginning to understand the value cloud technology can add to organisations and, in some cases, are actually recommending its adoption. For example, in November 2015, the Financial Conduct Authority (FCA) stated that cloud technology “can facilitate entry and/or expansion, and increase the ability of financial services providers…to renew their IT systems in a more efficient manner.” This advice has resulted in established firms looking at their existing processes, in order to identify how the cloud can be used to enhance performance.

Cloud technologies can be utilised in many areas, but a big one for the financial sector is communications, more specifically cloud telephony, contact centres and web collaboration. Stringent regulations implemented after the financial crash include requirements from the FCA, Central Bank and MiFID, and all aim to improve communications and increase transparency in order to mitigate future risk. As such, any cloud telephony technology needs to ensure compliance with such regulations, not leave companies falling short.

What to look for when selecting a cloud telephony solution?

With a plethora of cloud-based telephony solutions available, it’s easy for financial services organisations to be overwhelmed by the choice. Every vendor will claim to offer the most innovative technology that will ensure compliance with the ever-growing list of rules, but not all solutions were created equal. With that in mind, there are some key capabilities firms should look out for when selecting a cloud telephony solution.

Platforms should provide all communications channels – audio, message and video – and allow users to seamlessly switch between them. The cloud is empowering companies to work more effectively, and employees should be able to escalate calls between channels without having to ‘hang up’. Not only does this ensure that the most effective channel is being used to convey the message, but companies save money by only having to deal with one service provider.

The solution must record and archive all correspondence as this, for example, ensures compliance with the FCA’s requirement for anyone involved in trading to have their mobile calls recorded. Archived call logs then need to be effortlessly retrievable via a number of search criteria, such as date, time, duration, location, participants and keywords, with playback possible instantly and without the need for further programs. The ability to word and phrase search within these recordings for specific issues and trends also adds huge value to manage compliance and dispute resolution.

The cybersecurity capabilities of the solution have to be scrutinised too. Financial services companies also have to meet the requirements of strict data rulings, such as the Data Protection Act. Enforced by the Information Commissioner’s Office’s (ICO), any companies that are deemed to be storing and processing customer data without proper care and attention face significant fines. As such, any archived data needs to be encrypted as a minimum, with voice verification adding another layer of security around data. 

Perhaps most importantly, any solution needs to be forward-looking. Regulations are ever-changing and firms must invest in technology that can adapt to comply with new requirements. For example, the upcoming MiFID II requires all those involved in trading to have all calls – not just ones made on mobiles – recorded and archived for five years. Also, the EU General Data Protection Regulation (GDPR) will come into force in May 2018, and requires all companies that hold data on EU citizens to adhere to even stricter data controls. Companies that invest in backwards-looking technology will soon find themselves reinvesting in new solutions in order to stay compliant. It’s not sustainable. 

Ultimately, the cloud is becoming one of the safest, most cost-effective and efficient ways of managing communications, and companies that shy away from adopting it risk getting left behind. With the help of cloud telephony technology, financial services organisations can lower their costs, all the while improving customer communications and ensuring compliance.