By Steve Haworth, CEO of TeleWare Group
Global trading worth billions of dollars has shifted from trade floors to kitchen tables or lounges. Steve Haworth, CEO of the TeleWare Group, explores how traders can work effectively whilst ensuring they stick to the regulation requirements.
It started as a temporary measure. Banks quickly recreated the carefully monitored environment of the trading floor at thousands of sites to set employees up for a short spell of remote working.
It is now becoming clear, however, that remote work is here to stay. Companies including Facebook and Google have already extended working from home to the end of the year, and many banks will soon follow suit.
While Prime Minister Boris Johnson has set out a gradual easing in lockdown restrictions, finance industry watchdog the Financial Conduct Authority said it was still the case that, for now, only “key workers” in the finance sector should travel to their offices.
In the meantime, traders have adapted to life at home. They have proven that the technology works when working remotely and that they can do their jobs effectively. So, what steps do financial services companies need to take to keep employees scattered across the UK compliant?
Progress call recording capabilities
The Financial Conduct Authority (FCA) has long demanded that financial institutions keep records of all trades and transactions related to certain types of business for at least six months. Requirements to record calls apply to companies that receive and execute client orders to buy or sell in the financial markets. This is essential to the regulators’ ability to monitor the markets for abuse, such as insider trading.
When traders were initially requested to work from home, the FCA accepted that some scenarios may emerge where recording calls may not be possible. It suggested that financial services companies take steps to mitigate risks and come up with a plan to fix the problem. This represented a significant relaxing of the rules.
With traders now set to work from home for months or years, this sticking plaster is no longer enough. Companies must prepare for a future where the FCA clamps back down on call recording.
Fortunately, mobile voice recording technology (MVR) exists to help companies meet regulations. This includes secure and reliable voice and SMS recording, easy to use conferencing and robust, accessible voicemail. The technology has matured over the years and proven itself to be flexible and highly reliable.
Review regulatory requirements
In April, the FCA also relaxed MiFID II requirements to ease pressure and reduce employee workloads. The 10 per cent drop notification rule was delayed until September.
This short-term reprieve was welcomed by the industry; however, compliance cannot be postponed forever. Now is the time to carry out a full review of pre- and post-pandemic regulatory requirements. The Financial Services Regulatory Initiatives Forum is a good resource to start preparing for upcoming regulatory work in this new world of remote work.
Remind employees of approved channels of communication
Home-working has its pros. For some financial industry staff, home working has brought welcome flexibility. Yet one of the greatest risks of homeworking is that employees drop standards of behaviour expected on the trading floor. For example, they may take a more relaxed approach to communicating with clients on WhatsApp.
WhatsApp is a secure and convenient way to communicate – but the platform does not record communications for auditing purposes. Any trader using the app for work will be in breach of FCA requirements. Remind employees to follow regulatory guidelines at all times to avoid the risk of significant fines and trading bans.
Embrace change to enhance productivity
A range of compliance complexities under GDPR, MiFID II and Dodd Frank have meant working from home has not previously been an option for many traders.
However, the pandemic has highlighted practical solutions to keep traders trading from wherever they are. And employees have adapted to life at home. They can now walk away from their elaborate desk set-ups and be with their family within seconds.
Remote work is here to stay, and financial services firms need to embrace technology to help traders operate compliantly from home. If companies get this right, they will stay one step ahead of the regulators and support a positive lifestyle change for their employees.