As regulators increasingly focus on scrutinizing electronic communications in the financial sector, including text messages and emails, financial firms are now enhancing efforts to monitor and archive staff video calls to ensure compliance. This shift comes amidst concerns that regulatory bodies, notably the US Securities and Exchange Commission (SEC), may extend their oversight to video communication platforms like Zoom.
The SEC was previously focused on unrecorded and untracked business-related text messages sent over unauthorized platforms during the COVID-19 lockdowns when employees worked remotely. Finance firms are taking proactive measures, engaging technology specialists, law firms, and risk consultants to monitor and retain video calls, meeting record-keeping requirements, and mitigating potential risks associated with the inappropriate sharing of non-public information.
While video calls have been viewed as proxies for face-to-face meetings, they are currently subject to minimal or no formal record-keeping obligations. However, industry experts and insiders suggest that regulators will likely assess potential compliance failures tied to video calls in the future. Major global banks have already started recording Zoom calls, with some capturing specific staff interactions, including traders, while others are archiving all Zoom calls for potential review later if needed. This move aligns with regulatory requirements and aims to manage risks associated with the potential misuse of video communication.
The increased enforcement comes as regulatory bodies in the US and the UK intensify efforts to bolster protections for retail investors, especially in light of the ongoing meme stock phenomenon. The financial industry is adapting to a rapidly evolving work environment, acknowledging the need to effectively comprehend how to incorporate video communication into highly regulated settings.
Regulatory bodies like the US Financial Industry Regulatory Authority (FINRA) already have guidelines, such as the ‘FINRA Taping Rule 3170,’ requiring certain firms to tape-record telephone conversations between registered personnel and customers. As video calls pose unique risks, the financial industry is urged to deploy advanced technology to screen and archive these communications efficiently, anticipating potential expansions in regulatory reach due to technological evolution.
Financial institutions are proactively taking steps to ensure the responsible use and monitoring of video communication within their organizations to stay compliant and uphold the highest ethical standards.
