Compliance Considerations When Evaluating Your Financial Firm's Archiving Needs

Unprecedented technology advancements and an ever-growing number of communication channels have led to a significant rise in the volume of communications data that financial firms must archive and monitor. At the same time, intensifying regulatory scrutiny has prompted many firms to question whether their policies, procedures, and technology are up to the task.

Compliance considerations for archive selection

In a recent webinar hosted by Compliance Week, Compliance Considerations for Archive Selection, host and Managing Editor Jeff Dale facilitated an insightful discussion with Matthew Bernstein, President of Bernstein Data; Robert Cruz, Vice President of Information Governance at Smarsh; and Tiffany Magri, Senior Regulatory Advisor at Smarsh.

The panel of experts discussed the archiving and oversight challenges that financial services firms face and shared best practices for effectively managing communications compliance.

Addressing risk in the age of big data

Modern communications remain a persistent challenge as firms increasingly use multi-modal technologies to communicate with their employees and clients.

"The fundamental problem is that a lot of organizations still have technology that was implemented years ago, and in many cases, for specific individual use cases," said Cruz. “The velocity of information was very low because it was for a single purpose. The problem now is that firms have to deal with multiple systems. This creates a lot of inefficiency. It also creates risk because organizations need to have controls that work everywhere."

Business agility is another crucial factor. As Bernstein pointed out, “You're not going to stop businesses from innovating; they're just going to go to the compliance department and say, ‘You need to make this work.'"

At the same time, firms face relentless scrutiny from regulators, underscoring the complexity of the regulatory landscape, which includes oversight from the SEC, CFTC, FINRA, the DOJ, and other international bodies. This has significant implications for communications monitoring and oversight, compelling organizations to adopt more rigorous policies and procedures.

Regulatory expectations will continue to evolve as communication habits change. Organizations must take proactive steps to fortify their communications compliance strategies. By recognizing the growing regulatory focus and implementing effective controls across all communication channels, firms can better position themselves to mitigate risk and comply with regulatory requirements.

What's the best (archiving) solution?

Selecting a new archive solution to manage your digital communications should be evaluated as a critical component of a concrete compliance plan.

"The challenge is legacy systems were not built to support these changing requirements,” said Bernstein, “and not every vendor is able or interested in addressing those changing requirements."

Cruz noted the importance of business cases in setting firm objectives. Understanding where value and risk reside within your firm's data is important. A transparent and collaborative assessment of your firm's needs is a good starting point. The most important thing is to ensure that your most important asset, your data, is managed well.

"It's not just about the cost center. You have so much information just sitting in this archive that you can be inventive and innovative about using that data. So, I think the sky's the limit when you're looking at some of these databases and considering what you could utilize them to gain additional insight," added Magri. "A good place to start is understanding your data. How are you closing risk gaps and adding value to archive processes?

Streamline communications archiving to improve agility

Bernstein agreed that agile archive practices are a key focus for firms and regulators given the evolving nature and mounting sophistication of a multiverse of communication options, be it text, in-app messaging, or collaboration platforms, as well as the potential for harm to investors, firms, and the markets.

Bernstein described how contextual capture and preservation are among the most fundamental elements because anyone who has tried to reassemble a conversation that took place on Slack or Teams knows that if you're not capturing everything happening as part of that collaborative platform, it becomes worse than finding a needle in the haystack.

"Regulation is not the guiding post here. It's about adapting and modifying policies and, amongst these thousands of use cases, ensuring that you can apply the appropriate controls if something trips the red flag," he added.

Critical considerations for streamlining your data archiving begin with a risk and value assessment to understand the overall health of your existing environment. Modern communications capture and archiving continue to be persistent challenges for firms, particularly when multi-modal monitoring spans multiple solutions; Bernstein reflected on the need for agility when choosing a digital communications archiving solution.

"I can't get past the word agility. I think what we're all experiencing is the evolution from written communications to digital communications to generative applications or applications that have generative capabilities embedded within them. So, it's hard to know what that's going to look like even a year from now," Bernstein added.

Modern organizations need a comprehensive approach to archiving that enables continuous monitoring of multi-channel risks, ideally from a single vendor. Magri shared that many of her conversations with firms are about finding the right solution to manage all communications archiving.

As financial firms navigate the complexities of modern communication and regulatory demands, the need for a forward-thinking archiving solution has never been more critical. Investing in the right archiving tools and processes will empower firms to maintain compliance in an increasingly tough environment while driving business growth.

FEATURED WEBINAR

Compliance Considerations for Archive Selection

Watch Now

Share this post!

• Author
• Recent Posts

Smarsh

Smarsh® is the recognized global leader in electronic communications archiving solutions for regulated organizations. Smarsh provides innovative capture, archiving, e-discovery, and supervision solutions across the industry’s widest breadth of communication channels.

Scalable for organizations of all sizes, the Smarsh platform provides customers with compliance built on confidence. It enables them to strategically future-proof as new communication channels are adopted, and to realize more insight and value from the data in their archive. Customers strengthen their compliance and e-discovery initiatives and benefit from the productive use of email, social media, mobile/text messaging, instant messaging and collaboration, web, and voice channels.

Smarsh serves a global client base that spans the top banks in North America and Europe, along with leading brokerage firms, insurers, and registered investment advisors. Smarsh also enables state and local government agencies to meet their public records and e-discovery requirements. For more information, visit www.smarsh.com.

Latest posts by Smarsh (see all)

• Salt Typhoon Cyber Attack Strong Reminder to Use Encrypted Messages - December 20, 2024
• Set Your Compliance Journey Up for Success with Our 2025 Compliance Survey Insights - December 11, 2024
• Compliance Considerations When Evaluating Your Financial Firm's Archiving Needs - December 4, 2024

Smarsh Blog

Our internal subject matter experts and our network of external industry experts are featured with insights into the technology and industry trends that affect your electronic communications compliance initiatives. Sign up to benefit from their deep understanding, tips and best practices regarding how your company can manage compliance risk while unlocking the business value of your communications data.