London/New York, 19 July 2022: Financial firms are prioritizing communications surveillance, but most are still failing to monitor Social Messaging i.e., text and WhatsApp communications, putting themselves at risk of regulatory scrutiny and fines like those levied against Bank of America this week, according to the latest data from RegTech leader SteelEye.
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SteelEye data reveals that 41% of firms view communications surveillance as a key investment priority for the next 12 months, yet just 15% currently monitor WhatsApp
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Bank of America, Morgan Stanley, and JPMorgan have all faced multi-million-dollar fines for failing to properly monitor personal devices
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20% said keeping up with regulatory change was their biggest challenge in meeting regulatory obligations – as regulators race to legislate emerging comms channels
SteelEye’s Compliance Health Check report surveyed 170 senior compliance professionals in financial services and found that just 15% of firms are monitoring WhatsApp at all, despite the continued levying of huge fines against those found to be failing to monitor the communications of regulated employees effectively. Even fewer are monitoring Slack (9%) and Signal (3%) – and even considering the more expected channels there remains significant work to be done, with just 40% capturing Microsoft Teams, 40% Bloomberg Chat and 25% Zoom.
These findings may also suggest why 76% of financial services firms now rank surveillance as one of their two investment priorities for the next 12 months, with 41% focusing specifically on communications surveillance as a key priority.
It is unsurprising to see banks’ and US respondents’ prioritization of communications surveillance, given the fact that regulators are clamping down hard on communications rules. In the past week alone it has been announced that Bank of America and Morgan Stanley are both expected to be fined $200 million each by the Securities and Exchange Commission (SEC) – providing the latest headline-grabbing examples of the importance of adequate monitoring of employee communications.
New channels of communication and ways of working – such as remote and hybrid arrangements driven by COVID – are accelerating the pace of regulatory change. Regulators race to adapt to and incorporate the latest industry innovations, complicating the picture for compliance professionals, and as a result, 20% of firms said that keeping up with regulatory change was their single biggest challenge in meeting their regulatory obligations.
Brian Lynch, president of SteelEye Americas, said:“There remains a lot of work to be done by financial services firms to ensure they do not fall foul of regulatory action. This is a growing challenge for firms and it’s unlikely we’ll see it slow down any time soon, with new channels of communications emerging all the time. It’s encouraging to see firms prioritizing communications surveillance and recognizing the role technology can play in solving this challenge. Technology and robust data are essential to ensuring future-proofed compliance processes and procedures, and to avoiding unwanted regulatory oversight and damaging fines.”
About the research
The report has surveyed 170 senior compliance decision-makers in financial services across the UK and US. 80 responses were collected using OnePoll between January and April 2022. 90 responses were collected by SteelEye between October and December 2021. All survey responses were anonymous but have been thoroughly vetted to ensure the authenticity of the research. Below are the splits.
About SteelEye
SteelEye simplifies compliance for financial firms and saves them time and money. SteelEye’s holistic platform allows firms to achieve ROI from communications and trades Record keeping, Oversight, and Intelligence.
With SteelEye, firms can easily lock their data in a WORM-compliant vault, identify and stop early warning signs of harmful conduct, and demonstrate that they have watertight policies, procedures, and controls.
By connecting large volumes of data from multiple sources, SteelEye enables firms to meet regulatory obligations more quickly, efficiently, and accurately than any other solution. Firms also gain full visibility and control of their trading and compliance operations, with cutting-edge analytics that provide timely insights on risks and opportunities. Visit steel-eye.com to learn more.
For further information:
Emmy Granström
Global Head of Marketing – SteelEye
emmy.granstrom@steel-eye.com
+44 (0)203 821 6039
For PR inquiries:
Dee Fallon, Boldspace
SteelEye@boldspace.com
Tel: +44 (0) 7450 054640
