As the FCA MIFID II deadline grows ever closer we look at the alternative to call recording for smaller companies and Independent Financial Advisors (IFA’s)
KEY DATE: MIFID II (Markets in Financial Instruments Directive II) 3rd January 2018
Background: MiFID was implemented to increase transparency surrounding trade in financial markets and now MIFID II regulates further down the chain of companies and individuals making financial transactions including IFA’s and anyone involved with “electronic communications” (including landline/mobile phone calls, SMS, and chat) that relate to the reception, transmission and execution of orders, irrespective of whether those communications result in a trade or not.
Some might think that the FCA declaration of ‘While having a digital, taped recording of a call is not obligatory for all’, is a get out of jail clause there is a very strong case for call recording which should be considered. As the FCA states ‘it is important to consider the benefits of using this method (call recording) in comparison to simply taking notes’.
The Problem with note taking.
- Consider how secure the storage of notes will be, who has access to the files and how tamper-proof are those files? How could you be sure that if a problem comes to light those notes aren’t changed or even destroyed before the FCA Inspectors visit?
- Note taking requires a concerted effort and uses valuable time. It often requires a pause to set up and find the relevant documents and files etc.
- Note taking is open to interpretation and can lead to expensive, time consuming disputes.
- Note taking involves time wasting activities like typing up the notes, filing and physical storage space costs (notes will have to be kept securely for 5-7 years)
- You may well only entrust certain employees to take notes to avoid human error and what if that person(s) is off work or leaves?
- In the final analysis, the FCA Inspector may rule your notes to not be adequate or thorough enough and therefore don’t prove best practice.
- With the right type of call recording system in place you can ensure a high level of security including audit trails (who accessed recordings) encryption and finger print matching (tamper proof recordings) and user restrictions (so only named users can do certain functions and access the system).
- The correct type of call recording system will store calls for 5 years and more onto a hard drive or onto your own network assisted storage for easy retrieval at a desktop PC.
- A Call Recording system will be seamless, running in the background and can be set to record all or selective calls (for example when a transaction is taking place).
- Search for recordings can be achieved via several different criteria making it easy to replay telephone conversations and ensure a clear understanding of instructions, which for example can be checked by a supervisor.
- There is no more comprehensive proof of what a customer has actually said than finding a recorded call and e mailing it to the customer. And there is no better proof to an FCA Inspector than hearing both sides of the entire conversation and transaction.
MIFID II requires companies within scope to keep recorded calls (or notes) for up to five years.
Recommended solution for the smaller business are the Vidicode V-Taps and for the Enterprise customer the Vidicode Apresa which is available on premise or hosted, to rent or outright purchase. See our Vidicode page for the range of products or ask our call recording expert to find you the best possible solution by calling 0161 7672540.
Important: New Data Protect Regulation (GDPR) comes into force on 25th May 2018 that requires the permission of a customer to record their calls. However, recording calls to comply with the FCA and MIFID regulations is exempt as it is regarded as a legitimate legal obligation.
No feedback yet
Form is loading...