It’s clear that the flexibility regulators including ESMA, the FCA, FINRA, and the SEC offered financial services firms around the relatively unfettered use of modern collaboration and chat tools like Zoom, Microsoft Teams, and Webex by Cisco during the pandemic has come to an end. No action relief issued at the outset of COVID-19 has expired, and regulatory missives in the second half of 2021 indicate a marked change of tone and expectations for firms using dynamic communication platforms.
If you didn’t have a chance to attend Zoomtopia this year, there’s still time to watch the sessions as all are available on-demand. Theta Lake was a sponsor of the show and is a long-time partner of Zoom, offering its users the ability to leverage every aspect of the platform and have full coverage for security and compliance across those communication channels.
Collaboration tools like Microsoft Teams, Zoom and Webex Teams, RingCentral and Slack have become integral to how we work. With multiple ways to communicate and collaborate they’re vital for keeping workforces and customers connected whether remote, hybrid or office based. And with less and less physical in-person interaction, users are making use of the rich features to liaise and share information. Not least by adding personality and emotion with emojis, reactions and GIFs. But modern communications create compliance challenges when it comes to providing evidence and proof that is so often required for regulatory, HR, litigation or complaints resolution issues.
As enterprise communications technologies have evolved, the related challenge of managing business rules for groups permitted to use them and communicate with one another have become more complex. In financial services, business information barriers prohibit communications between specific groups to mitigate the risk of misuse of material non-public information (“MNPI”) to prevent market abuse and insider dealing. Information barriers requirements are spelled out in FINRA Rules 2241 and 2242, Section 204A of the Investment Advisers Act, in FCA’s SYSC 10.2 Rule as well as the SEC’s Exchange Act Section 15(g), which requires broker-dealers to:
Financial services firms have long used technology to supervise the communications and activities of employees, to ensure compliance with regulatory requirements and be able to detect issues such as market abuse, mis-selling or data privacy. It’s a key control for meeting regulatory obligations including MiFID II, CFTC, FINRA, IIROC and GDPR and a standard feature of working in a regulated industry. Likewise data loss prevention tools are commonplace across businesses to reduce the risks of data loss and exposure. All designed to protect consumers, employees, and shareholders.
The rapidly increasing use of chat in modern work-from-anywhere workplaces has exposed new compliance, privacy, and security risks. Not least the need to comply with regulatory obligations for retention, supervision, privacy and security mandated by regulators worldwide.
If the last 14 months have taught us anything, it is the importance of being able to pivot not only quickly, but securely. For many organizations, that requires leaning into unified communication and collaboration platforms in ways they never have before. The concept of “work from anywhere” has gained traction within the last year and organizations that have been able to embrace the concept and continue to build trusted relationships with their customers saw an increase in business because they were able to adapt. Implementing unified communication and collaboration tools was a strategic move, and as a result, organizations were able to deliver superior client experiences. In a recent webinar, “Using Theta Lake Compliance to Maximize your ROI with RingCentral,” Daniel Bridges, former CTO of Attivo Group, explains how Theta Lake and RingCentral transformed his organization and enabled him to offer a more seamless client experience.
Nineteen video meetings in one day is Zoom CEO Eric S. Yuan’s personal record. It’s a new way of working that many can relate to, and similarly struggle to get through. The notion that extensive on-screen calls cause feelings of fatigue is supported by Microsoft’s own research. But it’s not just the ‘constraints of video conferencing technology, when combined with increased cadence in meetings’ that’s causing fatigue, it’s the fact that video calls also require more engagement and concentration. The absence of the non-verbal cues we’d normally rely on in person, the need for sustained attention through meetings and a lack of variety in what’s shown on screen are all contributors.
On March 3, 2021, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) announced its 2021 Exam Priorities—the first such missive in the pandemic era. The Commission’s ability to be flexible and nimble in its approach to 2020 exams and plans for this year are laudable. To bolster that effectiveness, the recently created Event and Emerging Risk Examination Team will improve and expand OCIE’s rapid response capabilities. (I wrote more about the EERT here). Based on this year’s priorities, OCIE and EERT will be very busy in 2021.