US regulators are increasingly looking at companies’ oversight of their employees’ use of non-official communication methods, like texting and using certain apps
Autumn 2023 saw yet more fines imposed by U.S. regulators for recordkeeping breaches with the firms concerned having failed to stop employees, including those at senior levels, from communicating using unapproved methods, such as messages sent via personal text and WhatsApp. The total monetary penalties imposed in the U.S. is now more than $2.6 billion.
The results of Theta Lake’s 2023/24 Digital Communications Governance, Compliance and Security Report reinforce this continuing regulatory scrutiny, with 78% of professionals surveyed reporting that they expect regulators’ monitoring of communications will increase. The Theta Lake report offers insight into the challenges facing global financial services firms, analyzing the views and independent responses of more than 600 IT and compliance professionals. The report also highlights the need for an updated approach to compliance and security for the unified communications and collaboration tools that have cemented their place into the fabric of the workplace.
“Wall Street institutions do not get to keep regulators in the dark while enjoying all of the benefits of being a regulated entity in U.S. financial markets,” said Commodity Futures Trading Commissioner Christy Goldsmith Romero in an August statement in support of holding banks accountable for widespread use of personal text messaging or Whatsapp to evade regulatory oversight. “Those choosing to participate in U.S. financial markets are on notice — the era of evasive communications practices is over. The CFTC will hold you accountable. It’s time for Wall Street to stop waiting for an enforcement action before it changes its practices. Tone at the top must change on Wall Street. Change can only happen if the banks’ C-suites establish a culture of compliance over evasion.”