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Compliance Recording Has Come Full Circle

It seems hard to believe that it was only 10 years ago that the FSA, as it was known back then, removed the mobile phone taping exemption from the call recording rules introduced in March 2009 with COBS 11.8.

The initial legislation, designed primarily to tackle market abuse, required capital markets participants to capture and retain all relevant voice and electronic communications…except calls and texts from mobile devices, due to a lack of reliable solutions to achieve this at the time.

Since the removal of the mobile exemption in November 2011, so much has changed.

But has it really…?


The Technological & Regulatory Revolution

Possibly the understatement of the year, but technology has certainly moved on since then. Remote working and collaboration tools, the Internet of Things, Natural Language Processing, Artificial Intelligence, Big Data analytics, even electric cars - the world we live in now is, in many ways, almost unrecognisable compared to a decade ago.

The regulatory landscape has also transformed, with EMIR, MiFID II, MiFIR, MAR, SMCR, GDPR…and of course Brexit. Change is inevitable – like death and taxes, it’s one of the few things in life you can be sure of.

On the other hand, some things always stay the same.

 

The Infancy of Mobile Recording

I remember speaking to hundreds, possibly even thousands, of Compliance Directors, CCOs and IT Directors about mobile call recording solutions between 2008 and 2011, as it became clear that it was soon to become a regulatory requirement.

These conversations varied greatly from company to company. While many firms were aware of the changes afoot and were open to discussing and reviewing the technologies available, there was also considerable resistance.

Bearing in mind this was all pre-MiFID II, “we’re buy side, we don’t need to record” was a common objection from certain fund managers. But even among many investment banks and brokers, there was a certain incredulity and a degree of rebellion – “…making us record mobiles now, how dare they? Whatever next!?”

Some even grouped together, lobbying against the new legislation, firmly believing it wouldn’t stick. And when it became clear that it was actually going to become a reality, rather than adopt a recording solution, many went the opposite way.

They banned the use of mobiles through policy.

 

A Little Bit of History Repeating…

It’s difficult to imagine many (any?) firms banning mobile use today…

But now there are new communication channels: tools like Teams, Zoom, WhatsApp and WeChat, which have become indispensable over the past couple of years. And the FCA has made it clear that these must also be recorded if used for any in-scope communications.

The technology certainly exists to capture all of these channels and, even though it seems extremely likely that the reliance on these tools is only going to grow, we still occasionally come up against the same resistance and the same familiar mantra, “policy…policy…policy” – some things never change, and it would appear we have come full circle.

As the world starts to accept that there’s no going back to the old ways of working, that the remote/hybrid working is here to stay, and that the ways we communicate have changed forever, I wonder how sustainable that stance will prove to be.

 

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Steve Dourdil

Steve Dourdil

Business Development

DoubleEdge Professional Services / Kerv Group

Member since

18 Jun 2019

Location

London

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RegTech

Regulatory technology, is a new technology that uses information technology to enhance regulatory processes. With its main application in the Financial sector, it is expanding into any regulated business with a particular appeal for the Consumer Goods Industry. Often regarded as a subcategory under FinTech, RegTech puts a particular emphasis on regulatory monitoring, reporting and compliance and is thus benefiting the finance industry.


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