As companies face increasing compliance regulations due to financial reform, one area under particular scrutiny is the way they communicate, monitor and retain those communications. Firms have had to solve the question: How can we comply with the increasing regulatory standards while still using instant messaging technology to facilitate seamless communication?
“Market participants face an added layer of complexity when it comes to collaborative communication tools,” says Mayur Kapani, chief technology officer at ICE. “In addition to streamlining internal workflows, they’re also looking for a messaging system that enables efficient price transparency, access to other market participants and trading while meeting record retention requirements.”
For traders using AOL messaging, access to other market participants through compliant channels may be an increasing concern. In a recent update, AOL announced they were cutting off access to some third-party instant messaging apps, which will restrict their users from communicating with peers on other messaging systems. The firm also offers the ability to delete user conversations or to enable users to initiate an “off-the-record” conversation - capabilities that raise bright red compliance flags in the heavily regulated financial industry.
“We developed a messaging platform purpose-built for market participants' regulatory and workflow requirements, making it an ideal solution for traders and risk managers,” continues Kapani. “Our instant messaging solution balances peer-to-peer communication across different systems with the ability to execute trades in increasingly complex markets, alongside compliance tools. Because our system was built for the trading community, there’s an inherent commitment that we will continue to evolve our system to meet new regulatory and workflow requirements.”
9 Features Your IM Platform Should Have
While in-house compliance and security policies may vary slightly from firm to firm, the regulatory needs of marketplace participants generally require IM systems to include:
- Robust Collaboration Functionality - Instant messaging systems have become core to financial markets and are used to facilitate price discovery. To maintain accuracy and integrity of the information exchanged, it’s crucial that you have the ability to reach a variety of market participants.
- Logged Conversations - To meet compliance standards, every conversation you or anyone at your firm has should be logged. Your instant messaging system should not allow off-the-record conversations or the ability to delete conversations in any circumstances. (In case you’re wondering, ICE IM doesn’t.)
- An Encrypted Network - Technology where user-to-user interaction takes place across a highly secure, encrypted network is crucial to protecting sensitive financial and personal data for your business and your clients.
- Secure Data – After it was discovered that an operator was archiving conversations and logging them by user, many firms have spoken out about their desire to have their messages belong exclusively to them. When you’re choosing an IM solution, it’s important to make sure logs kept by the technology providers of messaging platforms are confidential. (Conversations on ICE IM are confidential.)
- Record Retention – In today's current regulatory environment, record retention is a crucial compliance tool. You should look for a system that integrates with your existing infrastructure and archives fully-searchable message logs so you can easily review user conversations to ensure compliance.
- The Right Search Filters – It is helpful to be able to search through records for all conversations related to a specific user, a specific contract or a specified time frame.
- User Permissions – The ability to offer different permissions to different users can help you manage risk across individual parties. For example, a messaging platform that allows you to offer mobile access to a broker or restrict the use of multi-party chat rooms can enhance supervisory oversight at your firm.
- Integration with Existing Infrastructure – The messaging platform you choose should integrate with the existing security infrastructure at your firm. Finding a messaging system that is purpose-built for the financial community and offers customized compliance solutions increases the likelihood of that.
- Supports Full Financial Workflow – A system designed specifically for the financial industry offers firms distinct benefits such as enhanced messaging retention, end-to-end support for the trading workflow, integration with your existing infrastructure, and, in some cases, “smart” logic that recognizes trade queries as they’re entered and enables the user to access deeper research through a single click.(ICE IM offers all of these features.)