Changes to call recording procedures for financial firms
Last month, the Financial Conduct Authority (FCA) announced a change to call recording procedures for financial firms, making it a requirement that all communications, including mobile calls, are recorded. The move to record all communications while working from home presents a stark difference to the leniency originally shown in response to the pandemic when lockdown first began last March. And failure to comply will not be tolerated by the regulator.
So, now is the time for financial firms to ditch any makeshift deployments and take this area seriously.
What does the ruling mean?
At the start of the year, the FCA’s expectations for firms to record all relevant communications, including voice calls, when working remotely were announced. In its updated guidance, the FCA said: “At the start of the pandemic, if your firm moved to an alternative site or a working from home arrangement, we asked you to consider the broader control environment in view of the new circumstances.”
“Given the extensive duration of these arrangements, we now expect you to record all relevant communications (including voice calls) when working outside the office.”
Businesses who had to quickly implement remote working initiatives in response to the pandemic, with hastily set up technology, will need to rethink their strategy if their current set up doesn’t comply. And the announcement shouldn’t really come as a surprise. Remote working has been in play for almost a year now, which is plenty of time for firms to assess their regulatory compliance and implement the right solutions to meet today’s requirements.
Why is it important to monitor calls?
Recording conversations is an important area. And despite the original leniency, the FCA expects firms to fulfil its recording obligations. Especially as the risk from misconduct may be heightened due to remote working, and the increasing use of un-monitored or encrypted communication applications for sharing sensitive work information.
Since the pandemic began, it’s been a balancing act between the need for strong record-keeping and meeting employee needs for using private communication applications for convenience. To ensure compliance, mobile call recording is integral, especially with a remote workforce that’s heavily reliant on mobile devices.
What to do?
Obviously, businesses need the technologies in place to not only ensure compliance from a call recording point of view, but also employee efficiency and productivity. Technology that can record mobile calls, therefore, is important.
Additionally, greater training is required so employees understand the need for call recording. The FCA’s expectations are that businesses should make sure they offer regular refreshing training for staff to confidently use new technologies.
And with training comes more robust policies. The FCA reminds firms that they must continually update their recording policies and procedures. And that includes any that have been adopted for remote working arrangements.
As an immediate action, any financial firm that hasn’t reviewed its call recording policies since MiFID II was implemented in January 2018 should, as a matter of urgency, carry out a policy and procedure review to make sure they are fit for the remote working environment.
The FCA has made it clear that failure to adhere will not be accepted and it won’t be enough to simply update the relevant policies. Firms must prioritise these new rules and ensure staff are appropriately trained to use new technologies as well as aware of the new policies.