Compliance managers struggling to manage off-channel comms risk – study

Compliance 0Despite the fact that the majority of financial firms have banned the use of social media platforms such as WhatsApp and WeChat, compliance officers are not convinced this will be effective in managing the risk of off-channel communications.

This is the finding of a survey conducted by electronic communications compliance firm Global Relay.

While 59% of firms have introduced bans, just 3% of compliance officers strongly believe that such a move is effective.

The study also found that 62% of respondents were most worried about getting staff to comply with recordkeeping and supervision rules, while 54% stated the difficulty in monitoring all the communication channels used by employees.

The survey comes on the back of high-profile fines issued by regulators over the use of unapproved communication channels.

Earlier this month, the US Securities and Exchanges Commission charged HSBC Securities and Scotia Capital with a failure to maintain and preserve electronic communications, issuing the two firms with penalties of $15 million and $7.5 million, respectively.

According to Chip Jones, executive vice president at Global Relay, the decision to ban the likes of WhatsApp is a recognition of “the severity of the risk”, but the lack of belief in the efficacy of bans shows that there needs to be a “more effective approach to ensuring compliance” and a “cultural shift” within organisations.

 “Currently, getting people to take measures seriously is more challenging than staying on top of all communications activity, which would certainly be enough to keep any compliance manager awake at night,” said Jones. “This balance needs to shift.”

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