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Financial services firms struggling with ecommunications

Thor Olavsrud | May 30, 2016
In its sixth annual survey of electronic communications compliance, compliance and ediscovery specialist Smarsh reports that financial services firms are struggling to retain and supervise the growing volume and variety of ecommunications.

Who's supervising this stuff?

"As we analyze data from our own customer base and from the industry through projects including our annual Electronic Communications Compliance survey, a series of conclusions surface that cause concern, individually and collectively. Set against the backdrop of increasing regulatory scrutiny, the conclusions weave a story that becomes downright troubling," Marsh writes in the survey. "To put it bluntly, supervision is broken. (But, it can be fixed)."

Prohibition is ultimately unsustainable because firms need to demonstrate to regulators that the policy is adhered to and enforced, Marsh writes. Many firms, he writes, are taking a 'head-in-the-sand' approach, waiting for regulators to provide more guidance or their peers to receive penalties before they get serious about their oversight responsibilities. That's a ticking time bomb, Marsh writes. Other firms are trying to extend what they've had in place for years for the email channel. But the volume of email continues to grow, and attempting to 'flatten' all electronic content — from social media platforms, file-sharing platforms, text messaging and new messaging applications like Slack — exacerbates that problem while also making it harder to find specific items and understand their context.

"Creating a sustainable, scalable and holistic approach needed for effective electronic communications supervision today can't be done overnight, but it can be done," Marsh writes. "It requires the coordination of the right processes, technology and human capital across stakeholders from IT departments, compliance, legal and marketing units. This upfront work, however, will deliver strong ROI by reducing costs and resource needs while strengthening the effectiveness of supervision to find and address the real risk across all content types."


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