Survey Reveals Remote Communications Lack Supervision in Finance Industry

Digital risk management company Smarsh recently released the results of its annual Risk and Compliance Survey used to gain insights from compliance professionals in the financial services industry. The results of this year’s survey revealed that remote working conditions brought on by the pandemic have created new vulnerabilities for clients, and industry professionals are very concerned.

The unprecedented use of remote technologies to help manage work tasks during the last 12 months has made companies appreciate that cloud-based working will be a permanent staple across all sectors, even after the pandemic ends. But industries that deal with sensitive client information, such as finance, must follow strict rules and regulations for certain activities.  Smarsh’s survey found that out of 100 participants, 70% said that their organization switched to remote access during the pandemic. However, only 22% of that group reported using oversight programs for the communications content. This means that sensitive user and employee data could be very underprotected, and could lead to serious legal issues if left unchecked.

Stephen Marsh, Founder and Chairman of Smarsh, said, “The pandemic has accelerated digital communications trends that are positioned to remain part of the long-term industry landscape, regardless of what happens in the public health arena this year and beyond. Given the incredible growth in volume and variety of digital communications content, firms need to make sure that they have extended their retention and oversight efforts accordingly. Those that fail to do so are much more vulnerable to risk."

Using communications tools such as Zoom or Microsoft Teams can be incredibly useful for speaking with customers and employees, but lacking proper cybersecurity for company networks can leave the data for these programs out in the open. Under normal circumstances, financial professionals have severe penalties for mishandling sensitive information that belongs to customers. But Smarsh’s survey found that 63% of participants felt that they would be able to satisfy examiner demands for communications data if requested.

"Firms are facing an urgent need for much more comprehensive supervision of the broadest possible array of digital communications and collaboration tools," added Marsh. "Regulators have made it clear that failure to do so will trigger significant fines and penalties. 

If leaders in the financial services industry want to give peace of mind to both customers and employees, network security and monitoring must become a top priority as our workforce continues to embrace the ongoing trend of remote activity. Regulators have made it clear that, pandemic or not, sensitive information must be secure under any and all circumstances.

Edited by Maurice Nagle