The financial advisors that actually use social media are struggling to stay compliant, as ongoing innovation in electronic communication technology means supervision isn’t easy.
A recent survey from electronic archiving and monitoring firm Smarsh found that nearly half of respondents (45%) said they are in constant catch-up mode, rather than proactive mode, when it comes to electronic communication compliance.
“In addition, prohibiting younger workers from using personal devices and messaging applications to conduct business is no longer a viable option,” the firm said. “As new multi-modal networks such as integrated voice, video and chats are requested or approved for use, compliance teams will need to get ahead of retention and supervision standards.
Text is a leading compliance gap and perceived source of risk
The top perceived sources of risk for survey respondents were SMS/text messaging (77%) and collaboration platforms such as Microsoft Teams (36%).
Respondents also reported compliance gaps in which they lacked archiving and supervision solutions for many allowed popular communication channels, including Instagram (50%) and SMS/text messaging (40%).
Use of personal devices is now the standard
Three-quarters (75%) of those surveyed allow employees to use personal mobile devices at work. At the same time, 44% of respondents lacked confidence that their organizations were capturing and archiving all business communications via allowed mobile devices.
However, compliance teams are also starting to understand that “archived data can be extremely effective in finding potential violations of fraud, data privacy, human resources and legal rules …turning compliance from a cost center into a value driver.”
“Nearly half of respondents (47%) now believe that electronic communications compliance is more than a cost/risk mitigation center, as it can also contribute to topline growth by maintaining valuable customer intelligence.”
This figure is up from survey results in prior years, the firm concluded, when an average of 39% of respondents in 2017, and 32% in 2018, provided alternative use cases for archived data utilization.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
