Compliance Continues to Be a Key Driver for Financial Institutions

By Will Hopkins, Sales Director at Red Box Recorders

For those working in the financial sector, the regulatory environment is increasingly complex and still evolving, with firms having to devote more resource to governance, risk and compliance issues than ever before.

There has been a steady stream of legislation for several years now and this is set to continue with new regulations in the form of MiFID II, REMIT, MAD (I&II) and MAR that will make the need to monitor financial transactions even more important. In fact, a 2015 Thomson Reuters ‘Cost of Compliance’ survey found that 70 percent of firms are expecting regulators to publish even more regulatory information in the next year, with 28 percent expecting significantly more.

One of the most notable pieces of legislation to affect the financial markets in recent times is the Dodd-Frank Wall Street Reform and Consumer Protection Act, introduced in the US in 2010, which among a number of requirements, introduced the need for organisations operating in the over-the-counter derivatives market to record all oral communications relating to daily trading activity. The Act doesn’t just apply to US-based financial institutions but also non-US-based institutions that trade with the US. Now we are seeing other G20 members putting their own legislation into place that is equally, if not more, stringent.

Failure to comply with regulations could result in an organisation having to suspend operations or face a heavy fine.In 2014 Britain’s Financial Conduct Authority (FCA) penalised firms a total of £1.47bn for non-compliance. And it is not just organisations that are at risk. Fines to individuals totaled almost £3 million in the UK last year and personal accountability remains a focus amongst regulators globally.

The sheer number of regulatory challenges within the finance industry means that compliance continues to drive our company strategy at Red Box. The main focus of Quantify Recording Suite, our voice and data recording solution, is to help financial institutions achieve compliance by capturing and storing recordings in a way that’s secure, efficient and makes retrieving records for investigation and auditing purposes quick and easy.

Wide-ranging connectivity is also an important priority for Red Box, with Quantify capable of recording communications from devices across a wide range of telephony, trading and unified communications (UC)platforms. This means that all spoken communications relating to a trade or business deal can be captured in full.

Ongoing maintenance and system support is vital for organisations that need to ensure continuity and to address this, Red Box offers comprehensive global support packages that cater for wide-ranging business needs. To facilitate this, we have strengthened our global team to ensure that support can be offered swiftly at a local level.

Red Box believes that it is increasingly important for financial organisations to demonstrate to regulators not just that they have a resilient, robust voice recording system in place, but that there is a proactive approach to maintaining compliance. As a business our emphasis is on pre-empting any issues before they happen by using data to help predict and prevent them. This is achieved through automated monitoring and an alerts system that provides compliance and IT personnel with the information they need to ensure system processes are operational and that all conversations are captured.

Across all regions of the world we are seeing an increasing requirement for flexible, scalable and future-proof solutions that are easy to implement and manage. According to the Thomson Reuters report, regulatory matters are consuming disproportionate amounts of board time, from correcting non-compliance and preventing further sanctions, to implementing structural changes to meet new rules. The need to choose trusted technology is therefore an important one.

By working closely with leading technology partners and certifying our platform with theirs, Red Box offers piece of mind that our solutions integrate seamlessly with supported telephony, trading and UC platforms. Plus, with many organisations wanting to address all of their telecommunications requirements through a single procurement source, our alliance with key global resellers mean that customers can choose voice and data recording as part of a complete telephony and trading solution.

There is no doubt that conducting business in the current regulatory landscape is challenging for all financial institutions. As ways of doing business evolve and regulations change accordingly, the need to choose solutions that are flexible enough to keep up with needs is paramount. At Red Box, we’re committed to working closely with our customers and partners to understand their pressures and develop enhanced recording solutions that support compliance demands, both now and in the future.