Congrats to FINRA on yet another tremendous Annual Conference! As always, it was a terrific opportunity to catch up with clients, prospects and colleagues from around the industry. This year’s conference marked a major milestone for us, our first as a joined team of Smarsh + Actiance. We were thrilled to hear extremely positive feedback and excitement over the breadth of capabilities we will bring to market.
The energy level at our booth, suite, and receptions was high throughout the entire conference, with several key themes dominating our discussions.
- Text messaging: Beginning with our full-house executive briefing on Monday, we spoke with many firms seeking solutions to address the use of text messaging by registered representatives in response to FINRA’s guidance on the use of social media in April 2017. Unsurprisingly, many firms continue to update their mobility strategies and BYOD policies and are beginning to shift their focus toward technological solutions that can facilitate and enforce those changes.
- Archiving replacement: Many firms we spoke with are actively investigating solutions to help migrate data from legacy on-premises and first-generation cloud archiving tools to solutions designed to address today’s messaging, social, and collaborative applications. The discussions here focused on a common set of issues: approaches to create more predictability in migration project costs, identifying defensible methods to delete unneeded data prior to moving to a new archive, and strategies to overcome the difficulties created by cloud archiving vendors who de-prioritize migration projects and attempt to extract exorbitant fees from their customers to export their data.
- High risk activities: Following the issuance of FINRA’s recent guidance on Heightened Supervision and discussed here, many conversations focused on how Smarsh + Actiance can aid compliance when working with high risk brokers and activities designed to avoid supervisory controls. It appears that many firms are exploring how they can move beyond simple random sampling and basic lexicon-based supervision in the direction of more sophisticated approaches toward content surveillance.
- GDPR and Data Privacy: What happens when you conduct your annual conference at 11:59:59 in front of the launch of a major piece of data privacy regulation? TONS of questions and discussion! How do we product EU citizen data? Can we respond to the 72-hour breach notification? How does GDPR potentially conflict with regulatory retention requirements? We believe that the elevation of data privacy is terrific news for our industry (as we’ve extensively discussed) as it will create further differentiation between technology vendors, separating those that have been constructed with data privacy “By Design and Default” from those who weren’t.
Conference keynotes and break-out sessions also produced interesting perspectives from across the industry, including more cryptocurrency, block chain, and cybersecurity discussions than one could consume. Additional topics of interest included:
- Examples of how firms are attempting to apply artificial intelligence to big data problems. These include detection of money laundering activities, using natural language processing to search 1 billion messages consisting of more than 1 trillion words, and using contextual search methods to identify communications in over 1 million trades in an average day. Clearly, large financial services firms are big data, and innovative use of AI in this market will continue to lead the way for other industries.
- In a session on social media, a survey of attendees revealed that 55% of respondents continue to prohibit the use of social media beyond publishing static profiles and using pre-approved content. This was a surprisingly large percentage which suggests that firms have not yet identified meaningful solutions to address the perceived risks of broader social media adoption.
- In the same social media session, FINRA signaled that firms would soon see new guidance covering messaging apps to address the growing use of tools such as SnapChat, WeChat, and WhatsApp.
Clearly, the financial services industry is living in very dynamic times with new forms of client communications encountering new threats, new regulations, and emerging analytically-driven technologies that are attempting to help mitigate the risks. This year’s FINRA Conference provided an excellent forum to bring together the practitioners, regulators, and vendors to engage on these important topics. The team at Smarsh + Actiance is excited to be a part of the discussion.