Communications compliance

According to a recent Theta Lake survey, over 75 finance firms were fined in 2024 for failing to comply with communications regulations. The challenge of remaining compliant while using digital tools continues to grow, with almost two-thirds of financial firms anticipating even more regulatory requirements on communications. Here, Kristian Torode explains how UC software can help financial service providers remain compliant…

Regulatory compliance in financial services is critical for ensuring transparency, protecting consumers and maintaining trust in the industry. Financial institutions are required to follow strict guidelines on data retention, security and monitoring of communications to prevent fraud, insider trading and other financial misconduct. However, as digital communication tools become more prevalent, ensuring compliance has become more complex.

 

Consequences of non-compliance

While fines for failure to comply with communications regulations are more prevalent in the US, there have been several cases affecting financial services firms in the UK.

In August 2023, Morgan Stanley was fined £5.4 million by Ofgem, the UK’s energy regulator, after the bank’s traders discussed wholesale energy prices over WhatsApp on private devices. Use of the platform does not meet regulatory standards for data retention and monitoring, as financial service providers are unable to record these messages concerning energy trading.

Despite industry speculation, the UK Financial Conduct Authority (FCA) has chosen not to implement an outright ban on WhatsApp for business use. Instead, the FCA expects firms to implement policies and monitoring tools to ensure compliance when using such platforms. While this provides some flexibility, firms must still navigate the challenges of maintaining secure and auditable communication records.

 

Balancing security and convenience

For financial businesses, the challenge lies in finding a communication solution that is both secure and convenient. WhatsApp appeals to many due to its familiarity and features like group chats, voice calls and file sharing. However, while convenient, it presents serious risks in data privacy, security and compliance, making it unsuitable as a primary communication platform for highly regulated industries like finance. To address these concerns, UC platforms offer a viable alternative.

UC platforms integrate multiple communication tools, including voice, video, instant messaging and file sharing to eliminate the need to switch between multiple pieces of software.

As a result, UC offers the convenience of more familiar tools such as WhatsApp while addressing compliance concerns. Its security features can include end-to-end encryption, centralised access management, real-time monitoring to detect potential compliance breaches, built-in archiving for regulatory adherence and consent management to meet data protection requirements.

One example is Vodafone Business UC with RingCentral, which combines Vodafone’s connectivity with RingCentral’s advanced cloud communications technology. Thanks to its reliability and business-grade security, RingCentral is already trusted by a wide range of financial businesses.

Digital business communications will continue to play a key role in the financial services sector, but not at the expense of traceability and data security. Unified communications offers a secure, compliant platform for financial services without sacrificing convenience.

For advice on choosing a compliant unified communications solution for your business, contact our expert team.