Compliance Automation

How can you know for certain that your compliance capture, archiving and replay works properly, all the time?

It’s an important question because this is what regulators audit for. Financial trading companies that fail to demonstrate dependable supervision can face heavy fines.

The regulatory scope for capture and storage includes all electronic channels. Modalities include video, audio, IM chat, audio and video conferencing, email, team chats, and various UC features like screen-share, file-share, images and emojis. Some social media and popular messaging apps are also relevant.
Most capture can be performed with a high level of confidence; many systems provide their own recording solutions. The VR systems applied to Trader Voice and other systems require careful management. If all required conversations are being captured, the task remains to demonstrate that all records and data:

  • Reach the appropriate storage repository.
  • Are stored for the correct period in terms of regulations and legislative hold period (and deleted at the end).
  • Are easily searchable and playable, with sufficient clarity, as part of an integrated multichannel solution.
  • Can be pulled into meaningful reports and trade reconstructions within defined timeframes.

Population Management and Provisioning

There are cultural, legal and regulatory variances from country to country. In some places, bank staff accept that they will be recorded so it’s easier to apply general policy. In others, individual privacy rights present a much stronger factor. In all cases, it is seen as bad practice to make unnecessary recordings but failure to make necessary ones can be disastrous. Some companies find it hard to present an auditable, global list of supervised users. Some level of central control is required.
We have developed TIMM Compliance™, an extension of our communications management service. The database stores an up-to-date list of users and rulesets. When new starters are being set up, the proposed lines can be audited, with straightforward approvals and rejections processed automatically. These would include internal connections that are either essential or a flagged as having a conflict of interest. It is only the less certain lines that are passed to Compliance staff for approval.

Data Reconciliation

Several systems now ingest recordings and data from multiple channels. They may capture one of more of the channels themselves. Depending on the capture system, integration type and transfer protocol; data and records arrive at a central repository immediately or at regular intervals of up 24 hours. The process can lack transparency. Some systems provide their own reconciliation, but most banks see a need for a third party solution. Some of those with significant coding resources are developing their own systems. JP Reis also have the ability to develop data reconciliation engines. There are data reconciliation/lineage solutions on the market although (in late 2023) the recording compliance use case is still quite new for them. Data reconciliation is an area that requires some level of automation, preferably with an interactive dashboard and the possibility to run bulk testing.

Storage

The storage of video means increased capacity requirements and costs. Video is 14 times more data rich than the equivalent audio. Automation at the storage layer relates to the application of retention rules, the addition of capacity as required, deletion and compression of records, and migration to cold storage as appropriate. As capture becomes more commoditized, intelligent storage becomes a greater differentiator. Productive search and replay may be a higher priority but storage is critical. Some banks develop their own cloud solutions but the majority will select a third-party vendor.

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