|This article is an excerpt from the Smarsh 2017 Electronic Communications Compliance Survey Report. This survey of financial firms shows that while many have begun to apply resources to supervision, firms struggle to focus on the channels that have the most potential for risk.
Download the full report here.
Against the backdrop of political shifts in Washington and growing popular distrust of “big finance,” the seventh annual Smarsh survey of compliance professionals in the financial services industry reveals that the electronic communications compliance landscape has become broader, more complex and more scrutinized.
More firms are finding that gaps in retention and supervision programs have consequences. Examinations have become more comprehensive, with regulators focusing in particular on supervision processes. FINRA reported 99 books and records cases in 2016, resulting in $22.5 million in fines. Compared to 2015, that represents a 423% increase in fines.
In conjunction, compliance professionals’ concerns have expanded. One significant area of concern is the growing number of non-email communications options, particularly mobile communications.
Many of the archiving and supervision compliance gaps identified in previous years have narrowed. A comparison of 2016 vs. 2017 data illustrates that firms are moving to implement archiving/supervision solutions. Year-over-year, notable compliance gaps have decreased: LinkedIn (-35%), Corporate IM (-35%), SMS/text messaging (-28%) and Facebook (-26%). That said, a significant number of firms are still vulnerable because they have not taken action to appropriately supervise their employees’ business communications, particularly mobile, social and instant messaging.
Even when supervision is happening, compliance teams must decide where and how to best allocate their finite resources to efficiently and effectively identify and address non-compliant communications and other actions that pose risks to their firms.
This article is an excerpt from the Smarsh 2017 Electronic Communications Compliance Survey Report. Download the full report here.