Financial services must turn to AI to meet the regulatory challenges a remote workforce brings

More News

Posted on: 21/01/2022

Originally published in Global Banking & Finance Review.

As the Omicron variant surges around the world, many workforces continue to work remotely. As well as logistical challenges, the financial services sector in particular has faced mounting pressure to ensure that it remains compliant in the face of this disruption.

Whilst 2020 saw some regulatory leniencies when it came to the requirements placed on firms to record and monitor all communications, updated guidance – such as that published by the UK’s Financial Conduct Authority (FCA) – means that businesses around the world have had to update their policies, refresh their training, and put in place rigorous oversight to ensure the recording of all conversations – on mobile, video and instant messaging apps – or face severe repercussions.


Climbing the compliance mountain

It has long been the case that financial services organisations must choose a call recording solution which complies to a number of requirements starting from capture, retention and archiving to proactive prevention including surveillance and risk detection from voice recordings with sufficient audio quality for replay to assist with evidence collection and event reconstruction. The ability to reconstruct full conversations that take place during trade or customer transactions is critical, so capturing all voice data is imperative for detecting unethical practices and ensuring that this information is available when the regulator calls.

However, the challenge of monitoring those working remotely is exponentially more difficult and forward-thinking institutions are increasingly turning to AI to help them remain compliant. It’s no surprise, then, that banking and professional services are two of the industries making the largest investments in big data and analytics solutions, highlighted in the Worldwide Big Data and Analytics Spending Guide from International Data Corporation (IDC).

According to analysis from New York-headquartered Behavox, which uses AI to flag problematic conversations to clients, finance workers are ten times more likely to share inside information during phone and video calls than other text-based platforms. Financial institutions around the world are taking steps to understand what is happening in every corner of the business, such as JP Morgan bankers using a messaging app which actively records calls and the request by Credit Suisse for its employees to allow the bank to access their personal mobile phone data if they choose to use it for communicating with clients or colleagues.

The pandemic has provided an opportunity for financial firms to revaluate and transform the ways that they work, and eradicate legacy processes which have been in place for decades. Many incumbent firms are bringing new technologies which they may never have considered before – such as Microsoft Teams – on board to unite their hybrid workforces. And in a world of evolving regulation, from the likes of MiFID II and Dodd Frank, the need for providers of financial services to proactively monitor conversations and keep a secure and accurate record of communications is greater than ever.


Banking on AI

It’s likely that remote working will be a part of the mainstream at least until the end of the pandemic. As organisations face challenges around communication compliance, a more proactive approach to risk management is required to comply with existing regulations – and those that 2022 will bring. KPMG acknowledges that, ‘through AI specifically, organisations have the opportunity to increase the potential efficacy and effectiveness of both their operations and compliance processing and analysis.’

AI and deep learning platforms provide advanced compliance capabilities, from natural language processing of recorded communications to automate the detection of compliance risks, to applications which can identify patterns and trends that can proactively prevent incidents of unethical conduct, financial crime and compliance breaches. These kinds of tools can provide greater compliance certainty and security.


The fight for data sovereignty

However, one of the roadblocks that many financial firms are facing is that they are losing out on unlocking the potential of their valuable data through AI analysis. This is because the third-party providers that they use to capture their communication data often put walls up around the information they collect in order to push up their own share prices. The result is that businesses’ market choice is fundamentally stifled, with the absence of control over various choke points such as databases.

Financial firms looking for a voice data capture partner should look for those which offer an open platform that allows data to be fed into applications of their choice – such as CRM compliance, business intelligence and AI and analytics tools. They should also ensure that the partnership will not impede on their ability to retain access to their data, always.

For financial services organisations, adapting to the ‘new normal’ of hybrid working whilst fighting against rising regulations is a difficult, but not impossible task. Every interaction within the organisation equates to data that can keep the business compliant – they just need the right tools to interpret it.


Richard Stevenson, CEO, Red Box.

View all