Tuesday, December 6

2022 FINRA Annual Conference: Technology Compliance | NCC Group


2022 FINRA Annual Conference Technology Compliance Issues

Two compliance topics that have been influenced by the pandemic are working from home (WFH) and Bring Your Own Device (BYOD). The entire workforce has shifted, and what was once considered an exception is now the rule. Although these practices have been widely accepted, ensuring compliance when working remotely is an important issue for the FINRA community. Here’s a brief synopsis of the issues.

Remote supervision

Remote and hybrid work is here to stay. One of the first questions asked when people started getting together with friends again was, “Are you back in the office, or still working from home?” The answer was almost never 100% back in the office. A study by Ladders shows that nearly 20% of all professional jobs are now remote, and that is expected to increase to 25% by the end of 2022.

For those companies embracing remote and hybrid workforces permanently, the impact on regulatory compliance will be significant, according to Payments Journal. One reason for the increased compliance risk is that people tend to behave differently when in their own homes as compared to in the office, where they may feel they are being more closely monitored. Casual conduct increases the compliance risk, and this is exacerbated by the influx of new devices and communications channels.

Bring Your Own Device

Although the term BYOD has been around for well over a decade, the trend of using your own personal device for work was in decline by 2018. However, when the pandemic hit, companies had to scramble, and many employees working remotely had to rely on their own personal devices – blurring the line between personal and business device use.

Yet even pre-pandemic, there has been an ongoing battle between regulators, banks, and employees over the use of personal devices in the financial industry. Late last year, $200 million in fines were levied around the use of employees’ personal devices for business purposes, including unapproved WhatsApp messages, texts, and emails that had been ongoing since 2015, CNBC reported. Federal law requires financial firms to keep meticulous records of electronic messages between brokers and clients. This is a safeguard so regulators can ensure those firms aren’t skirting anti-fraud or antitrust laws, and these unauthorized electronic messages represented a widespread record-keeping failure.



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