Keeping on top of compliance amid remote work
Many view firms' archiving and capture responsibilities as a costly and time-consuming burden, even though the possibilities provided by this treasure trove of information are massive.
Constant technological evolution means that the work-from-home trend was likely always to take root. But because of the pandemic, it arrived faster than anyone could have imagined.
Though millions have returned to the office — including many at financial services firms — the genie is out of the bottle: Telecommuting is here to stay.
This new reality has no doubt yielded a variety of benefits. Perhaps the most often cited is that remote workers are more productive and better able to focus on critical tasks without getting bogged down by a lengthy commute or distracted by idle watercooler chit-chat.
Still, hurdles remain. Many complain of feeling isolated in a remote environment, while business leaders say remote work makes it challenging to collaborate and brainstorm.
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No doubt our industry is not immune to those concerns. Yet the bigger challenge is that the explosion of workplace collaboration tools has exacerbated the already demanding regulatory and compliance responsibilities financial advisory firms have in this area.
While capturing and archiving internal communications aren’t new requirements, tools like Teams, Zoom and Slack have complicated this process. With email no longer the preferred method of communication, firms have been forced to confront an entirely new universe of communications data — and the sheer scale and scope of it has brought the industry to a crossroads.
It won’t be enough just to find effective ways to handle such data in the future. Firms must also change their mindset surrounding that data. Here are some suggestions for how to navigate the emerging landscape.
Look at data as a strategic asset. In essence, firm archiving and capture responsibilities are mandates from the Financial Industry Regulatory Authority Inc. and the Securities and Exchange Commission to collect data. Many currently view this obligation as a costly and time-consuming burden, even though the possibilities within this treasure trove of information are massive. For instance, what if companies could quickly analyze their data to identify and mitigate a wide range of risks? This kind of capability could help to prevent everything from culture-busting incidents of harassment to business-killing financial crimes. Similarly, what if firms could spot unrecognized business opportunities or better understand their customers’ needs? It’s possible to achieve these things, but it requires a change in mindset.
Embrace the cloud. Managing data wasn’t easy when all advisory firms had to worry about was email. But it certainly was easier, frequently involving on-premise data centers. Now that the number of messages and channels has shot up — and will only continue to grow — that approach is no longer sufficient. In the future, leveraging cloud-based solutions will be a critical component in firms meeting their archive, discovery and supervisory needs. As former Finra chief technology officer Marty Colburn said in a recent webinar, “Friends don’t let friends build data centers.”
Forget about manual content inspection techniques. Since humans have only so much capacity, machine learning and natural language processing tools are the key to financial firms unlocking the potential of their communications data. Admittedly, the performance of such tools today is uneven. The holdup? In part, the problem stems from the data sets not being good enough. This further highlights the importance of the cloud, which would allow firms to preserve enough data to provide AI and NLP with the “fuel” they need to perform at a high level and, importantly, improve over time.
Ask any financial services business leaders about their biggest worries, and most will cite regulatory and compliance concerns. It explains why most respond to these challenges defensively. Yet by taking a more proactive stance — and looking at these obligations as an opportunity — it’s possible for firms to protect themselves and their employees, gain valuable insights and propel their businesses forward.
[More: Failure to overhaul cybersecurity for remote work creates regulatory risks]
Robert Cruz is vice president of information governance for Smarsh.
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