Compliance teams not keeping pace with new collaboration tools

Compliance teams not keeping pace with new collaboration tools
Firms are using apps like Microsoft Teams and Slack to chat, share documents and schedule meetings without having policies or archiving tools in place.
NOV 26, 2019
One of the most rapidly growing types of software in corporate America is digital collaboration tools like Microsoft Teams and Slack, and financial services firms are among those adopting them. More than 60% of financial firms now allow the use of these collaboration tools to communicate via instant text message, audio calls and video chat, as well as to share files and schedule meetings, according to a survey of 300 compliance professionals by technology firm Smarsh. [Recommended Video: Jessica Liberi of eMoney: The essentials of adoption and integration] But 20% of the firms that allow the use of these platforms don't have a written policy as they do for email, giving rise to new compliance risks. Of those that do have a policy, less than a quarter have archiving or supervision processes in place. A third allow the use of meeting applications, which often now include chat and file-sharing features, without any restrictions or policies governing their use. When the adoption of technology and compliance controls are not in sync, it creates what Robert Cruz, senior director of information governance at Smarsh, calls a "compliance gap." Part of the problem is that adoption is often driven by staff before compliance and legal teams can assess the risk and put proper guardrails in place. [More: To move advisers into the future, adoption is the new innovation] "In fact, [these tools] look like a place to socialize with 'chat buddies,' versus potentially carrying risks not only [involving] compliance, but also in introducing potential leaks of intellectual property and data that can escape with departing employees," Mr. Cruz said in an email. "In short, these items are hitting review workflows now and compliance teams are not comfortable in their ability to identify and remediate the risks." Though it has been a year since the Securities and Exchange Commission's Office of Compliance Inspections and Examinations issued an alert regarding text messages, Smarsh's survey found a compliance gap persists. Forty percent of firms that allow texting don't have archiving or supervision in place, even as 77% of respondents identified texting as the greatest compliance risk. [More: New iPhone can end the days of carrying around two phones] They survey also found an ongoing compliance gap for social media. The biggest offender is Instagram: only half of the firms that allow the app have an archiving and supervision system in place.

Latest News

Advisor moves: Atlas tops $1B as Wells Fargo, UBS add bank veterans
Advisor moves: Atlas tops $1B as Wells Fargo, UBS add bank veterans

Wells Fargo adds two bank-channel recruits, UBS lands a JPMorgan Chase veteran, and a multi-family office lifts Atlas past $1B

Advisor mom’s son used her password to log into clients’ accounts, sell deal with conflicts, according to Washington state
Advisor mom’s son used her password to log into clients’ accounts, sell deal with conflicts, according to Washington state

“The state comes down on you in years when you make 40% returns for clients,” said Bill Swayne, the advisor and son of Candace Swayne.

Osaic in talks with Anthropic as AI reshapes advisor workforce
Osaic in talks with Anthropic as AI reshapes advisor workforce

The Independent broker-dealer giant has had “active conversations” with the Claude maker, which is days away from its expected IPO

The retirement milestone advisors aren't tracking
The retirement milestone advisors aren't tracking

For Gen X clients entering life after work, answering the financial question isn't enough to solve the entire retirement equation.

Wealthtech firms target stock pay, pensions and heirs for advisors
Wealthtech firms target stock pay, pensions and heirs for advisors

Tools from Grantd, Income Lab and Healthspan Wealth aim to keep RIAs involved in clients’ biggest money decisions

SPONSORED Best Practices for Engaging Women Around Alternatives

Growing wealth, evolving priorities, and untapped opportunities are reshaping how women approach long-term investing.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.