1. 86 February 2010 | riskSA Magazine
R
egulators have had to extend
their compliance requirements to
keep pace with changing business
norms, such as increased use of the
mobile phone for transactions and
services. Companies are therefore required to
find more efficient and sustainable compliance
solutions, some of which come in the form of
evolving technologies and recording solutions.
Manual solutions can be inefficient and
inaccurate
Kgabo Badimo, managing director of Spescom
DataVoice, explained, “With the introduction
of legislation like the Financial Advisory
and Intermediary Services Act (FAIS) and
Financial Intelligence Centre Act (FICA), many
organisations have applied make-do, manual
solutions to meet compliance requirements.
For example, many professionals, such as
insurance brokers and lawyers, will do an after-
the-fact ‘write-up’ or report of a telephonic
interaction with a client rather than make a
recording as the conversation takes place.
“This is highly inefficient and relies entirely
on the memory and perspective of the person
writing the report. In contrast, a recording
provides an indisputable record of what was
said and agreed to, and often gives the listener
insight into the nuances of the interaction, such
as intent.
“As compliance requirements become more
intensive and volumes of interactions increase,
sustainably maintaining these records using
‘manual’ procedures will become near
impossible.”
International regulators step it up
These challenges are being recognised by
international regulators. A good example,
noted Badimo, is the imminent policy change
expected from the UK’s Financial Services
Authority (FSA), extending call-recording
requirements in UK financial markets from
fixed-line and electronic communications
to mobile calls. It is likely the EU and US
regulators will follow suit.
South African FSPs are already under a
considerable compliance burden. The FAIS Act
requires authorised financial service providers
to implement procedures and systems to store
recorded verbal and written communications
in an appropriate electronic or recorded
format. This must be accessible within seven
days for inspection and easily translated to
written or printed form. Records and recordings
of client transactions relating to premature
cancellations of products and complaints,
as well as the continued compliance of
the financial service provider, need to be
maintained for a minimum of five years. This
means organisations must be able to quickly
search for and access these records, requiring
digital archiving of documents, notes and files.
New technology
According to Badimo, new technologies and
approaches can be integrated with existing
systems transparently and often at low cost
to deliver a reliable solution. He said, “Take,
for example, the multifunctional devices that
enable scanning and digitisation of contracts
and other documents, allowing for easy
electronic storage; or the new services and
software applications that enable extraction of
information from large databases.”
As technology advances, business norms are
changing. Spescom has developed a mobile
phone recording solution that complements
its standard landline recording solution,
both of which can help you comply with FAIS
requirements. In addition, it has launched
a new product – ReMo – that provides the
same benefits for individual professionals and
consumers using mobile phones to conduct
business.
ReMo automatically captures subscribers’
mobile conversations, pictures and documents,
uploading them to a secure hosted site, where
this data can be managed, viewed, played,
downloaded or sent by e-mail.
Recordings such as these are legally admissible
in a court of law. They are time- and date-
stamped, and have an algorithmic signature
that makes any tampering with the recording
evident.
Get in gear
As the demand for compliance enabling
solutions grows worldwide, more technologies
will become available.
“It is important to begin to gear your
organisation to transparently meet compliance
requirements. These requirements need to
be integrated into processes that surround
the marketing, sales and support of financial
products and must be geared to support
the technologies being used by brokers and
clients,” Badimo concluded.
Keep pace with
complianceKgabo Badimo | MD at Spescom DataVoice