24 October 2017
Gary Wright

Gary Wright

Gary Wright - BISS Research

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Social Networks and the Regulators

07 April 2011  |  3920 views  |  2

Actiance's Sarah Carter gave a fascinating presentation at the Finextra Social Media Day, which clearly resonated with the audience, when she got into the very thorny topic of regulatory compliance.

So much of compliance today is about client protection and of course there have been far too many regulatory breaks from a host of different financial services firms. MiFID two is going to put further steps in place for client protection processes and systems, across all asset classes and not a minute too soon. However, the Social Networking world we now live in puts many of the client protection rules into areas of extreme threat. It is for this reason that I was taken by Sarah's presentation of actiance.

The system which allows monitoring and control of connections to social networking both internal and external, has the laudable virtues of flexibility making it especially valuable for use in Financial Services Organisations beyond it's extensive capabilities for use in Social Networking. For example when Financial Services firms are working on an IPO, information concerning the IPO, is only released on a ‘need to know' basis, for fear that any leak will ruin the deal or may allow insider dealing.

Firms normally deal with this by putting a lockdown process in operation where access to the information is only available by approved personnel physically entering into a secure area. Quite frankly this only works if the people involved are honest but as we know not everyone is.

To enhance this security, actiance is able to electronically put security wraps around individuals and groups, communication capabilities, within a price sensitive transaction or timeframe.

Actiance has already mapped its products capability in proving compliance to regulatory requirements in the USA, Canada, UK and into mainland Europe.

The problem of security will never go away completely and Social Networks are here to stay and will continue threaten the largest deals and primary transactions. Realistically, we can't restrict access to social networks, only monitor. Although I have many reservations concerning consumer control I have none when it comes to controlling internal banking staff. Actiance looks like a very good solution for implementing a market abuse protection capability whilst proving compliance. 

Comments: (4)

Martin Davies
Martin Davies - Causal Capital Pte Ltd - Singapore | 07 April, 2011, 17:52

 

This is a tidy blog article but surely "Financial Services firms are working on an IPO, information concerning the IPO, is only released on a ‘need to know' basis" should have always been the case.

In reality the best social network could be a coffee house or the good old pub.

It always has been in the past.

Electronic security wraps are nice or nanny state depending on how you look at them but the problem with them is they don't stop people talking around the photocopier.

The trick is to incentivise staff to hold confidence of the firm rather than cut their access off to the world or attempt to look over their shoulder on every key stroke.

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A Finextra member
A Finextra member | 07 April, 2011, 17:59

Yes Martin your right but the Regulators are very much in play on this now and insistant on a firm having as secure a set up as possible. The burden of proof is with the FS firm. SM just entails a more extensive and comprhensive technical solution

Its sad but true that the days of the coffee shop are gone. Careless talk costs jobs and ultimatley that is what should encourage loyalty but how do you prove it?

I hate the nanny state and look out for my comments on this tomorrow

Thanks for your comment

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Martin Davies
Martin Davies - Causal Capital Pte Ltd - Singapore | 07 April, 2011, 18:14

I agree with you and thanks for sharing this post as it is interesting how security will develop overtime.

A lot of good comes from the internet certainly from a marketing perspective and we all know when the firm is ready to promote their IPO they will be begging the twitter pages, news sites and investors to talk about them ... They just don't want the information leaked too early.

Its difficult world and the world has changed ... One can walk through the trading floor of any bank and see staff on their mobile phones and iPads which in many cases have richer interfaces than the banks computer systems.  Not sure how to capture all this lot especially as so many people use avatars when communicating online.

None the less bring on Actiance, if it makes for straight forward word sensitive tracking of data traffic, that has to be a good start.

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A Finextra member
A Finextra member | 07 April, 2011, 18:19

Thanks Martin and i think you have got it

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CEO of B.I.S.S. Research, founder of the BISS Independent Accreditation for all systems and services provided to financial services companies internationally. Guest Lecturer at Reading University and...

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