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Technology Helps Firms with Remote Work Compliance

    

Remote work is a part of the current normal in the financial services industry, in the short term and maybe even longer. Arizent, the parent company of American Banker, PaymentsSource, The Bond Buyer and other titles, recently released a survey polling executives to understand how firms are planning the return to the workplace for their employees.

 

Even as some firms have begun the process of reopening offices, the survey shows that almost 6 out of 10 employers are uncertain about the timing of when employees return to the workplace, and more than half report reluctance from their employees around going back to an in-person work environment. The survey also highlighted that 48% of employees are very interested and 30% are somewhat interested in continuing to work from home. 70% of financial services and 80% of professional services firms polled are likely to allow their employees to continue to work from home if their position allows it.

To provide insight on how companies in the industry have handled a remote workforce, FINRA issued Regulatory Notice 20-16, outlining common work from home practices observed by firms.

 

The notice states “Firms may wish to consider whether the practices described are applicable to their own circumstances and would enhance their supervisory systems and compliance programs. FINRA reminds firms that they must continue to implement a reasonably designed supervisory system appropriately designed for their size and business model. In addition, firms must memorialize in writing any adjustments made to their policies and supervisory procedures as a result of the COVID-19 pandemic.”

Hear from industry experts about regulatory expectations for the second half of 2020.

Efforts provided by firms to facilitate remote work over the past months include:

 

  • Holding firm-wide calls and videoconferences for all staff so that firm leadership could provide updates on operations
  • Communicating clear guidance about firm expectations while working from home
  • Transitioning to virtual training to continue preparing for upcoming regulatory obligations

Firms also focused on reminding employees of the importance of maintaining the confidentiality and security of customer information and material nonpublic information (MNPI) by conducting activities including:

 

  • Training on the use of firm technology, tools and services in a remote work environment
  • Making available new digital collaboration platforms and applications
  • Reminders about increased cybersecurity vulnerabilities and potential fraud risks in a remote work environment

Firms also employed “notices and training to remind associated persons about their confidentiality obligations with respect to retail and other customers’ information, including complying with material non-public information requirements; maintaining a private workspace while working from home; and taking extra precautions when working near family members or roommates. If applicable, certain firms also noted that staff should consider whether the employment of family members or roommates working from home may raise a conflict of interest that needs to be reported to the firm.” Learn more about how MNPI remains a high-risk area for compliance.

 

According to the notice, firms that relied on web-based tool and cloud-based services and regularly tested their technology and processes believed they faced fewer difficulties transitioning to a remote work and supervisory environment. The Arizent survey also notes that employers surveyed are planning investments in videoconferencing, cybersecurity, collaboration tools, cloud-based computing and communications platforms over the next 12 to 18 months to support their employees’ needs.”

 

In our recent webinar Building a Business Case to Support Process Improvements and Compliance Technology Change we asked Mitch Avnet from Compliance Risk Concepts about what firms are doing to address remote supervision of employees, and how this plays into technology purchasing decisions.

 

Mitch told us “There are certain processes and practices that have historically been done manually at some firms, and it could be done that way because everyone was in a common office and there was a way to get information from an individual to the compliance officer or supervisor in person.  One of the places where we’ve seen this issue emerge is with personal securities transactions and statements. So while I would love to say, all of my clients have automated their brokerage feeds, they haven't. And where some firms were getting physical statements in the office, they have now been having employees upload and scan PDF statements. This situation can easily be addressed through implementing technology to do these things.”

MyComplianceOffice provides easy-to-use, SaaS-based compliance management software that enables companies around the world to reduce their risk of misconduct. Our powerful platform lets compliance professionals demonstrate that they are proactively managing the regulated activities of the company, employees and third-party vendors.  

 

Want to learn more about how we can help? Let us know and we’ll set up some time to talk.