Responding to Broader Regulatory Scrutiny with Comprehensive Archiving

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It’s a fact, financial services firms must retain their electronic communications for regulatory compliance, regardless of the devices, applications or channels that advisors use to communicate. This requirement includes archiving of emails, social media posts, text messages, web content, communications with new internal collaboration tools and any other emerging platforms adopted by advisors.

Unfortunately, many firms still focus almost exclusively on the archiving and supervising of email. Meanwhile, regulators like FINRA are steadily broadening their scope and increasing their enforcement of recordkeeping rules. They now routinely penalize firms that neglect to supervise the multiple types of digital content being used for business communications, including text messaging.

Unsupervised forms of digital communications now represent a greater risk than ever for firms due to this growing attention. Firms that don’t make swift adjustments are increasingly vulnerable to sanctions of their own. While most firms understand that they need to change urgently, their compliance managers may already feel overburdened by their standard supervision processes for email archiving alone. That’s why it’s important to find newer, smarter, and more efficient ways to effectively archive and supervise a broader set of communications channels, including text messages.

In response to seeing this trend developing in recent years, new platforms and technologies have emerged to enable the automated, comprehensive archiving and intelligent supervision of all popular digital content types. A comprehensive archiving platform is a single repository and set of functionalities that supports all types of digital content, and the real value comes from what can be done with all that data. Comprehensive archive platforms are an important industry disruption because they create the needed consolidation and efficiencies for a firm of any size to scale its supervision initiatives.

For example, a comprehensive archive gives compliance teams the power to make instant connections between different types of message formats related to a single conversation thread between specific parties. Policy-driven supervision functionality also allows compliance teams to automate the flagging and prioritization of any content that merits more scrutiny based on specific criteria.

By using a comprehensive archive and leveraging an automated approach to policy based supervision to enforce a firm’s governance policies, review teams can evolve beyond antiquated random samples and lexicons with more granular policies and logic designed to find specific risk, such as complaints, fraud or anti-money laundering. Using the best practices of the financial services industry and the power of automation, compliance teams can also introduce and refine policies for known exclusions to reduce the number of false-positive messages to review.

Comprehensive Archiving Improves Efficiency

From there, specialized queue-driven review workflow capabilities enable compliance teams to focus high-priced professionals on the most pressing compliance risks in a targeted way. Individual messages containing specific types of potential violations can be intelligently routed to compliance professionals with matching expertise to evaluate and escalate them for remediation or dismiss them. Once the review process has been optimized, firms can then evaluate options to supplement or redeploy existing staff to more valuable tasks. For example, the cycles of human bandwidth gained from the more efficient use of a firm’s reviewer resources can then be directed at a broader set of content types, effectively reducing previously un-mitigated risks within an expanded compliance perimeter.

That’s just the beginning.

Many firms are already mining the search-ready content retained in their comprehensive archive for purposes beyond compliance and risk management. Those on the cutting edge are starting to explore behavioral analytics, relationship mapping, predictive logic, and correlation between data sets to surface and evaluate the information more efficiently for business insights. To leverage this innovation today and in the future, however, the content needs to be ingested and made available for the machine to learn from – in other words, it needs to be archived.

Creating a sustainable and scalable approach for effective electronic communications supervision can appear to be an elusive and complicated endeavor but it is surprisingly simple. The solution boils down to having the ability to reliably capture all your electronic communications from their source, index them and store them in one place. Compliance teams need to shift their attention away from the incremental addition of new content types and specialized, silo’d systems for each, and instead embrace a single comprehensive archiving platform that can handle all types of digital content under their purview.

In addition to the runaway volume of messages, the diversity of formats for electronic communications being used will only continue to grow. In response, firms must shift their approach away from a de-facto denial and prohibition reaction when they emerge, and toward compliant enablement with the new levels of supervision efficiency and effectiveness that comprehensive archive platforms and their specialized capabilities provide.

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About Author

Mike Pagani is a seasoned IT professional and recognized subject matter expert in the areas of mobility, identity and access management, network security and virtualization. Prior to joining Smarsh in November 2014, Pagani held executive-level corporate and technology leadership/spokesperson roles for Stay-Linked, Quest Software, NComputing, Dell Software and others.