Voice compliance: The changing landscape


Voice compliance: The changing landscape Ethical BoardroomBy Paul Willson – Head of Voice Strategy & Partnerships, Trusted Data Solutions



Compliance continues to be one of the most critical ongoing concerns for financial institutions, especially for those that scale across continents. Financial institutions sit among the most highly regulated and compliance is at the root of their daily operations and interactions. They must also implement policy that protects them as much as the clients they serve.

According to a 2016 report issued by global management consulting firm McKinsey, not only has the market seen regulatory fees drastically increased compared to operating income and credit-impairment costs, the number of regulatory topics has also expanded. Yet, none saw the rise of compliance as a business-critical key focus as they did in the aftermath of the 2008 global financial crisis.

The second Markets in Financial Instruments Directive (MiFID II), introduced at the beginning of this year, aims to ensure a more transparent and secure (NB: not secured) marketplace while at the same time removing barriers for cross-border financial services in the EU. But along with that came greater scrutiny of voice compliance.

Consolidating voice

Financial institutions, such as firms providing services linked to financial instruments (e.g. shares, bonds and derivatives), must record each communication – inclusive of voice – that is intended to lead to a transaction. By requiring this level of complete transparency, the primary goal of MiFID II is to ensure orderly trading behaviours. For most financial institutions, this means a comprehensive review of their current voice operations and, more importantly, the implementation of a defensible and compliant voice strategy. The General Data Protection Regulation (GDPR) layers on to the regulations trend, and institutions can only expect more of such regulation in the foreseeable future.

Under this new era of compliance challenges, it will not be enough to simply implement a new system from the biggest, loudest provider. Once seen as just an enforcement arm within the larger legal function, a passive framework with compliance playing an advisory role is no longer enough. Organisations will have to reimagine their voice infrastructure and practice, as well as who they select to partner with to implement it. The partner they choose must understand data outside of voice, the technologies and their integration; its knowledge must also be rooted in regulatory compliance. eDiscovery is instrumental in achieving a successful and reimagined compliant voice practice.

A compliant voice strategy — the fundamentals in
a compliance journey

Data: The digitisation of financial institutions There’s no doubt that the world is in the process of a digital revolution. With a multi-purpose device in everyone’s pocket, we can talk, trade and transact with anyone, at any time, no matter the location. With increased digitisation comes data and automation – and with that comes regulation. While voice itself has been a form of data for more than a decade, it is still a relatively new type of data to fall into the scopes of compliance. Just a few years ago, a Tier 1 bank was fined £2.5billion for Libor manipulation. This was one of the first times that voice communication was arbitrated and later highlighted as a high-risk area, with a specific callout about locating legacy records. As more institutions look to migrate their current voice systems or implement new ones due to a need for a more regulatory compliant infrastructure, cost effectiveness or other reasonings, it is important to be conscious of the overall total cost of ownership that extends to litigation factoring instead of just the acquisition and management costs. Any technology change should be aligned with a best practice and an expert service integrator to avoid the extensive costs of implementation, lifecycle management and the potential need for voice restoration or migration.

Resources: more effective change management As the saying goes, change is the only constant. In a highly regulated industry, such as the financial sector, change can come with a high price if not managed correctly. According to an in-depth survey of more than 100 senior banking officials across Europe and the US by SAS, most banks do not feel confident they have the right skills or resources to manage the compliance changes across the institution. In addition to quoting a more than 30 per cent increase in regulatory and compliance related hires, the study also revealed that 47 per cent feel the need for external consulting and improved IT infrastructure.

As opposed to the traditional compliance model of control testing, organisations are realising that technology is a persistent factor in compliance as a gateway to breach but also a vehicle for managing compliance and security. Institutions must invest in innovative solutions for a more modern risk-based approach that aims to understand business operations and the underlying risk exposures with actual risk identification and management, as well as the outsourcing of the expert teams to properly manage the process. Weighing risk is as critical as the factors you implement to manage them.

The reality is that there is no silver bullet for compliance. Each institution is faced with different challenges. The ones that can effectively translate regulatory requirements into management actions are ones that rise above as the leaders of the pack and will reap the competitive advantage as a result.

‘A passive framework with compliance playing an advisory role is no longer enough. Organisations have to reimagine their voice infrastructure and practice, as well as who they select to partner with to implement it’

For almost three decades at Trusted Data Solutions, we have assisted companies knee deep in litigation that need access to legacy data forms of all types, inclusive of voice. We have also worked with those that want a driver in ensuring that a proper end-to-end compliance voice strategy is written, implemented and managed. This has included some of the largest data management deployments and obtuse data restoration projects that enabled the Tier 1 offender to win.

Fresh new perspective As a transformation company with a technology and experience of restoring audio data dating back more than a decade – tape data even longer – we know it is important to understand a financial institution’s problem from both a data type and technology point of view. Our Technology Journey of Optimisation approaches risk mitigation from a technology standpoint, instead of looking at it from a compliance perspective – we work with the client to deliver industry specific, technology best practices to ensure their compliance.

Agnostic, agile approach The regulation landscape calls for a new compliance framework. It is important to deliver services based on a consultative view of providing what the customer needs rather than industry standards. Needing to quickly address problems sometimes means industry standard tools are no longer enough. Standard tools may be a starting point; however, it is important to optimise the existing infrastructure and build the fundamentals of a coherent compliance strategy around that.

Solving the problem securely, defensibly and with trust is the number one concern for our customers. Selecting the right service integrator can be a critical piece to the compliance puzzle, especially when it comes to specialised expertise, such as voice.

For organisations looking for a partner in voice technology migration, implementation, and end-to-end system support, we ask that they consider the voice reform, the dependency on technology and compliance in practice. We ask them to consider who they partner with, their expertise and their true scalability. A global bank needs a global partner that scales beyond remote employees, but sits in country, within a facility. We ask them not to take their role in this lightly but remember that the technology you chose is as critical as
the partner who implements it and then manages it. It’s time to reimagine your voice compliance strategy.


About the Author:

With over 35 years of direct voice information technology industry experience, Paul Wilson holds the role of head of strategy and partnerships across our Voice Compliance Practice. Willson is charged with spearheading Trusted Data Solutions’ (TDS) global voice partnerships and alliances with partners, ensuring that the company’s decades of voice expertise is adopted by a quorum of global partners and customers such as NICE and Verint to name a few. Additionally, Wilson works together with the technical and sales team to onboard notable tier-one banks and financial institutions to ensure they benefit from our comprehensive portfolio of end-to-end voice solutions and services, inclusive of hardware, software, lifecycle management and maintenance, voice logger retrieval and restoration.

Prior to joining TDS, Willson worked for BT, UBS, RBC, IPC and most recently ETrali, prior to its acquisition by IPC where he held leadership roles in strategy and engineering.