Compliance struggles to keep pace with new communications channels

Compliance professionals need to supervise all types of business communications, but a new survey shows that they're struggling to keep pace with the volume and variety of electronic channels.

Hosted archiving specialist Smarsh has released its sixth annual Electronic Communications Compliance Survey Report. The survey, of compliance professionals in the financial services industry, highlights that supervision practices aren't sufficiently addressing the compliance implications of ongoing trends, like increased regulatory scrutiny and the challenge of adapting to channels like social media and text messaging.

Among the findings are that over 40 percent of firms that enable employees to use LinkedIn and Facebook do not have retention and supervision solutions in place, leaving themselves vulnerable to compliance risk. This gap is even greater for mobile and text messaging, where 68 percent of firms that allow its use fail to archive the content.

Less than half of the respondents say they are mostly or completely confident that their current supervision program will effectively identify risk for their organization. Whether new content types are allowed or not, compliance professionals report low confidence that their firm is in full compliance with regulatory requirements. Over 55 percent of respondents from firms that allow text messaging for business communications, for example, have little or no confidence in their ability to produce these electronic records within a reasonable time frame.

Social media is the communication channel representing the highest perceived level of risk, cited by 48 percent of respondents. Too many or way too many messages are flagged for their review as part of the supervision process according to 40 percent of respondents, indicating firms either don't have the resources needed to effectively keep up with reviews, or they see too many false-positive search results.

More than 87 percent of respondents expect the resources dedicated to electronic message compliance will remain the same or increase only slightly in the next 12 months. Less than one in ten expect to receive a significant resource increase. Unsurprisingly, this concerns compliance professionals. More than a quarter of respondents (28 percent) cited insufficient budgets as a top concern this year, up from 22 percent last year.

Concerns about electronic communications policies, policy enforcement, and retention gaps remain high, indicating many firms are vulnerable to undetected fraud, errors, and potential regulatory enforcement penalties.

You can find out more in the full report which is available to download from the Smarsh site.

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