Firms must embrace electronic communication channels to stay competitive and meet client needs, but eComms come with significant compliance risk. Recent enforcement actions have seen high-profile firms and individual employees fined for infractions, including failure to properly save and store email messages and sending work-related messages using unapproved communication channels and personal devices that were not properly archived. 

To mitigate risk, firms must have e-communication surveillance monitoring tools that scan employee communications for suspicious messaging to identify risky communications.  

What is Communications Compliance?  

Communications compliance ensures that all organizational communications adhere to regulatory requirements and firm policies and procedures, preventing violations including off-channel messages and inappropriate content. Effective communications compliance involves monitoring, reviewing and storing employee communications to reduce risk, meet regulatory expectations and provide an audit trail providing sufficient and reasonable compliance.   

eComms Surveillance to Identify Risky Communications is a Core Element of an Employee Compliance Program 

Where are the areas firms need to look out for regarding communications compliance? It comes down to a three-step process of prevention, monitoring and archiving.  

Monitoring: Review Communications in Real Time Across Multiple Channels 

Training and policy keep most employees compliant with the organization's communications compliance standards, but firms must be prepared for bad actors looking for ways to skirt the rules. This scenario is where e-communications surveillance and monitoring become critically important. Comprehensive monitoring of employee communications uncovers red flags and suspicious patterns of behavior that can indicate insider trading and other illicit activity.  

Especially in large firms, the volume of communications to review can be overwhelming. Firms need workflows to screen out the routine to identify risky communications and raise the red flag issues for follow up. Rules and workflows should be configured to focus on the unique regulatory and business needs of an individual firm and should be continually updated as new apps and channels of communications enter the mainstream. AI-based detection and monitoring provides an even higher level of oversight, detecting complex trends and patterns to spot suspicious behavior and identify risky communications.   

Multi-channel monitoring tools that surveil a wide range of mediums beyond just email are crucial to a solid communications compliance strategy. If an employee is looking to go rogue, there is a good chance they are not going to send messages on their company email account. Bad actors will try to hide their tracks by using ephemeral channels where they assume their communications will be untraceable and unarchived, which is even more reason for a comprehensive multi-channel monitoring tool.   

As regulators use increasingly sophisticated tools to uncover criminal activity, they will continue to expect that firms will keep pace with the latest in eComms surveillance and monitoring technology. The right communications compliance software does more than screen emails for red flags. Firms should also be able to identify the riskiest communications channels and message categories, compare departments and locations, measure training effectiveness, and identify emerging risks and trends on both the organizational and employee level.  

And if you can look at an employee's communications behavior in the context of other areas of employee compliance, firms can take an integrated view of compliance over time.  

Archiving: Keep Communications in a Searchable and Reportable Multi-Channel Repository 

Regulators want to see tangible proof of a firm's e-Communications surveillance and monitoring capabilities. That's where archiving comes in. Regulators expect that firms will have a solution in place to store eComms for efficient search and reporting that meets the retention requirements of the firm's policies and procedures and the regulatory obligations the firm is beholden to.  

Ideally, communications from all channels are captured in a single archive for search & review. That includes communications data from third-party feeds as well. A single storage archive is easier to manage than separate and siloed solutions for individual channels. It's also easier to search – and spot patterns of concern – when all relevant communications are stored in a single location providing consolidated reporting and search.   

Prevention: Guide Employees to Reduce Risky Communications in the First Place 

A proactive approach to managing communications compliance across the firm is always better than a reactive one. That approach starts with clear policies and procedures that explain to employees exactly what the firm's rules around communication channels and when to use them, as well as controls and processes around what needs to be done if those standards are breached.  
 
Regular training ensures that policies have been shared with employees so they know what's expected of them. Following up training with attestations confirms receipt and understanding and provides proof points for regulators and auditors. Requiring employees to fill out disclosures gives firms a handle on what channels are used – and the opportunity to mitigate should employees disclose the use of unapproved channels.   
 
Electronic channels make communication quick and easy, but their informal and ad hoc nature makes it easy for people to type and hit send without much review or forethought, breaching standards of conduct even inadvertently. Firms can use eComms surveillance technology to remind employees of policies and procedures as they type, meeting people where they work and ensuring compliance rules and standards are front and center when it matters most: in the moment.   

Emerging Channels Demand an Innovative Approach to Communications Compliance  

Email has been a business standard for decades, and new forms of eComms like messaging apps are becoming increasingly ubiquitous. Messaging apps and texting provide a quick and easy way for employees to communicate with each other. Customers increasingly prefer to use these communication channels as well.  

Although it might be tempting for firms to enact policies that only allow advisors to communicate via company landlines and email, it is just not practical. Both customers and employees have come to expect quick and easy communications using electronic channels and mobile phones. Firms are obligated to protect themselves from damaging communications by detecting, measuring, and storing all company communications across multiple channels to identify risky communications and mitigate compliance risk.  

 Be Prepared and Compliant with MCO's Communication Compliance Solutions  

• Prevent, detect, analyze and measure communications risk  
• Identify unapproved communication channels  
• Reduce communications review time 
• Archive messaging in a single location for expedient search and compliance with recordkeeping