As digital means have become the standard in corporate communication, financial companies, like banks and investment firms, must comply with communication policies. They must observe proper communication practices to appease laws like financial regulation text message archiving.
Compliance with SMS archiving regulations and other messaging legislationis in the best interest of financial institutions, as noncompliance can lead to numerous consequences.
Financial firms should uphold communication compliance for the following reasons:
Governing bodies set strict communication policiesto protect companies and the public. Monitoring, recording, and archiving communications prevent critical data from being used in illegal activities, like fraud and insider trading.
With proper communication practices, institutions can monitor when sensitive data is being leaked to clients. For example, a compliance officer can listen to an employee’s phone transaction with the client to see if they are communicating appropriately. Using a lexicon of commonly used terms in insider trading, the officer can decipher if the two are involved in illegal activities.
Banks, brokerage firms, and other financial institutions are obligated by law to comply with communication policies. Failing to comply is considered negligence, as the guidelines are for the protection of the company and the people involved. This can result in serious legal consequences.
For instance, in the occurrence of a financial crime, investors can sue the institution for the lack of preventative measures. They can argue that the company’s compliance with communication policies is weak. This can result in detrimental costs in legal damages.
Having strong communication compliance is part of having a strong data security system. This can greatly enhance a company’s reputation. It can be used as a value-added proposition to grow clients. At the same time, the lack of protective communication strategies can result in client distrust, leading to a poor reputation.
With its impactful advantages, financial institutions should create strategies to comply with communication policies effectively. Learn how to achieve full communication compliance that aligns with the Securities and Exchange Commission (SEC). Read this infographic by TeleMessage, a leading message-archiving solutions provider.