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Truphone Advises on Key Lessons Learned In Mobile Recording Compliance

Come December 21, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), U.S. swaps participants will face a compliance deadline and be required to record all communications – both oral and electronic – conducted on mobile devices. In 2011, the United Kingdom’s financial services regulatory agency, the Financial Services Authority (FSA), implemented similar regulation mandating the recording of all mobile communications related to the execution of trades. Truphone, a global mobile operator and leading provider of mobile recording solutions, has identified key lessons that U.S.-based firms can learn from the experiences of their U.K. counterparts to better prepare themselves for the impending December deadline.

The recording of landline and electronic communications is not a new development within the trading community. Tools and services such as Bloomberg, Reuters, and turrets have been recorded for as long as they have been available to traders. Due to the close association of these services and tools with their desks and professional life, traders were able to accept this practice easily, and viewed it as “the norm.” However, with the prevalence of mobile devices being used in and outside of the organization – albeit corporately paid for and managed – the separation between personal and professional becomes blurred, resulting in pushback and resistance to the recording of mobile devices. Financial organizations in the U.S. must take steps to adapt to this cultural shift as soon as possible. While recording will not be immediately welcomed, a gradual approach through education and testing the necessary recording technology will be far more favorable than limiting or prohibiting device use.

Because of the availability of mobile recording technologies in the market today, firms no longer have to rely solely on managing compliance by policy. Mobile communication has become the cornerstone of all global business – not just banking – with more and more top tier banks moving wireless communication to the heart of their business. Organizations that choose to pursue “managing by policy” – limiting use of trader’s mobile devices – risk sending the wrong message to stakeholders, staff and customers, as well as risk business by inhibiting their customers’ ability to reach them.

From an organizational standpoint, the responsibility for mobile policy resides in a very separate part of the financial institution. With the introduction of mobile recording regulations in the U.K., the heads of trader voice, mobile and fixed-line – individuals who would otherwise not have had a reason to interact previously – had to work together for the first time to develop a company-wide mobile compliance plan and policy. This sudden introduction of different disciplines demanded quick and harmonious results, and was often challenging to achieve successfully. By acknowledging that this collaboration is a necessity, U.S. organizations can make efforts to plan ahead and bring the departments together to develop a cohesive compliance strategy well in advance of the deadline.

As a result of these organizational and cultural challenges, a number of firms in the U.K. took to pressuring the regulators to change, delay, or even withdraw the rule. Among the many reasons cited for pushing back the regulatory timeline was the lack of available technology or solutions to meet compliance. Like most large institutions, firms in the U.K. had long-standing, established relationships with many of the large telecom providers, and trusted them implicitly with their mobile and landline telecommunications. Unfortunately true mobile recording capabilities were simply not something the large telecommunications providers could deliver. Generic technologies could not provide seamless mobile recording, and still enable high-quality service.

Finally, for firms in the U.K., their efforts to change the deadline resulted in nothing more than a shortened timeframe to comply with the rule as regulators stood firm on their deadline. U.K. organizations found themselves faced with having to make very quick decisions, and then onboard new and sometimes sub-optimal technology within a short period of time. While it can be done, implementing mobile recording technology should not be left to the last minute. As with other banking technology, it takes time to properly research, test and onboard new systems. Onsite mobile recording technology is better when completed in batches, to ensure firms are well prepared and able to integrate with the current system.

For more information on the mobile recording regulation and technology options please visit http://www.truphone.com/tmr.

By Paul Liesching, Senior Vice President of Truphone Mobile Recording.

About Truphone

Truphone, Inc. is a member of the Truphone group of companies.

Truphone is the only mobile operator in the world that expands the reach of businesses beyond the borders of their home country. Truphone achieves this by providing multiple international numbers on a single SIM, enabling businesses to make international calls that are treated as local calls and providing contacts a direct way to get in touch on a local number. Truphone’s approach also reduces mobile roaming costs for voice and data services, keeping staff better connected when they travel. The company’s patented SIM-based offering works in more than 200 countries. With U.S. headquarters in Durham, NC, Truphone has offices across 4 continents and continues to expand aggressively. Our clients include FTSE 1000 and Fortune 500 companies across multiple sectors.

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