How to streamline and improve essential compliance management functions
Part 3 of a 3-Part Blog Series on Compliance Assurance
This is the final blog in our three-part series on Compliance Assurance, featuring Q&A interviews with NICE Financial Communication Compliance Marketing Director Arno Sybrandy.
Financial services organizations worldwide are under increasing pressure from mounting global regulations, including MiFID II. In the first two blog posts in this series, Arno shared his insights on how to make sure your firm is recording the right communications and how to prove that regulated users are being recorded. In this blog, he provides advice on how to streamline and improve essential compliance management functions, such as: responding to regulatory requests, adhering to records retention regulations, and making sure all regulated users are in the system and being properly recorded.
Given the many millions of calls many financial firms record annually, how can NICE’s technology help compliance managers easily retrieve recordings when needed?
Arno Sybrandy: Our global customers have numerous locations where they are recording communications for compliance. What they need is a centralized solution that they can use to find any calls, regardless of where the recording took place.
NICE COMPASS offers a single web-based portal for managing compliance assurance and recording across the enterprise. All functions of the system can be managed centrally, including searches for recordings. Searching is location-transparent. A single targeted search will return results for all locations, modalities and regulated users.
Searching is very advanced and user friendly and can be done with pinpoint precision. For example, you query by a trader ID, transaction number, time period, call duration, call direction (inbound or outbound), whether or not there’s a litigation hold, even by a user’s group (e.g. FX trader, Back-office employee, etc.).
Under MiFID II, firms are going to have to ensure that all conversations for all regulated employees are being recorded, including mobile phone communications. By implication, they’ll also need to be able to search for all types of recordings, regardless of the modality regulated users use to communicate (for example a desk phone, turret or mobile phone). NICE COMPASS’s centralized search engine addresses this need as well, by providing a centralized search facility across all modalities.
Following Dodd-Frank’s lead for a 72-hour turnaround-time, MiFID II also stipulates that response to regulator requests must be timely. How does NICE help firms adhere to this requirement?
Arno Sybrandy: Regulators can ask for many thousands of calls, spanning months or years, on a moment’s notice. Downloading all of these calls is extremely time consuming. Unfortunately, time is not on the firm’s side because as you noted, MiFID II stipulates that requests must be fulfilled in a timely manner.
Decrypting and downloading large volumes of calls is not only processing-intensive, it can be taxing on an active recording system. And it can take a long time. This is counter to new regulations which require a fast turnaround time.
NICE has solved this problem by developing a specialized extraction server (that’s part of NICE COMPASS). It extracts calls from the archive system (instead of a live recorder). You just set up a query to specify the calls that need to be downloaded and the system automatically decrypts and downloads those calls in a standard format, along with any associated call metadata. The requestor is notified as soon as the job is done.
Up to 1.7 million calls a day can be downloaded using just one extraction server. And the solution is also scalable – so the more extraction servers you have, the more calls you can download.
I understand that retention is also a challenge with new regulations. How can firms better manage the retention of recordings given the complex regulatory landscape?
Arno Sybrandy: It’s true, new regulations are making retention requirements more complex. Different regulations require different retention periods for different types of regulated users. For example, for some users the retention period may be five years, but for Forex traders it can be up to seven – and these varying retention periods need to be managed.
Also keep in mind that most financial firms are global businesses. Even if a firm is based in the U.S., if they conduct business with banks in EMEA they also have to comply with European regulations (such as MiFID II). It’s worth noting that on top of the broader regulations, different countries also have their own retention requirements and this further adds to the complexity.
NICE COMPASS makes it easier for firms to comply with these increasingly complex retention requirements. A centralized web-based portal allows you to configure retention periods for different asset classes, lines of business, and regulated user groups (to align with specific global and/or regional regulations).
Finally, we know that while it can be administrative nightmare, accurately inputting information for all regulated users is essential for compliant recording, retention, etc. How does NICE simplify this?
Arno Sybrandy: With compliance recording everything (recording, retention, search and retrieval) relies on traders and other regulated users being entered into the system correctly. We also know that peoples’ roles often change – maybe they get promoted, move to a new location. So there’s constant maintenance that needs to take place – who needs to be recorded, where they’re located, who has joined the company, and who has left.
If a firm has deployed recording systems in far-flung locations across multiple countries, user maintenance is an even bigger headache. Remote administrators would need to log on to each recorder separately to do adds, moves and changes – which could be extremely time consuming and prone to error.
To address these challenges, we created a centralized user administration capability in NICE COMPASS. Now, MACs (Moves Additions Changes) for all users and all connected recording systems can be done in one place. Firms have the ability to manage this centrally, locally, or in some combination of the two, depending on their own requirements.
NICE COMPASS also offers an expanded API (Application Programming Interface) for integration with other bank systems. Banks have very comprehensive HR systems that store up-to-date information on regulated users. Now that information can be automatically pulled into NICE COMPASS significantly reducing the administrative burden and improving data accuracy.
Where can I find more information on NICE COMPASS?
Arno Sybrandy: Below are some links to resources that compliance and IT managers can explore to learn more on this subject:
|Complete Compliance Assurance with NICE COMPASS|
|On-Demand Webinar - Navigating Regulations with Complete Compliance Assurance|
|On-demand Webinar – A Regulatory Typhoon: The Impact of MiFID II & MAR on Communications|
|Free consultation on how to comply with the latest trading regulations|