How Compliance Safeguards Financial Services Communications

How Compliance Safeguards Financial Services Communications

4 min read

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ASC Technologies | September 06, 2023

Compliance regulations impose clear rules on which parts of your customer communication must be recorded, documented, and archived and which ones must be exempted. Not being compliant with these regulations can entail heavy fines up to the point of losing your license. At the same time, the approach to customer communication has changed–an increasing number of conversations and meetings occur online.


Nowadays, financial institutions must ensure compliant documentation of their modern communication platforms across all media, including voice, chat, and video, both on-premises and in the cloud. Leveraging an intelligent recording, archiving, and analytics solution is recommended to prevent a costly compliance gap.


Legal Requirements for Recording and Archiving in Financial Services

Due to past financial scandals and increased cybercrime and money laundering cases, various directives and regulations have been passed in the last years, directly affecting the recording and archiving of customer interactions in the financial sector.



One is the Markets in Financial Instruments Directive (MiFID II). MiFID II provides a regulatory framework for investment services in Europe. Its purpose is to increase transparency in financial markets and protect investors. Banks and asset managers must keep records of phone or video consultations and any related electronic communication in a legally admissible form.


The stored data must be protected against post-processing, and archives cannot be manipulated. At the same time, the information must be easy to find and any manipulation traceable. The recordings must be kept for five years. The period begins when creating the recording. Upon request of the supervisory authority, this period can be extended to seven years.


Dodd-Frank Act

Another vital regulation for archiving and retaining electronic communication is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Dodd-Frank Act is a United States federal law passed to react to the 2007 financial crisis. The Dodd-Frank Act aims to promote the financial stability of the US financial market by improving accountability and transparency. It obligates companies to retain the recordings that could lead to a financial transaction, including a complete audit trail in a format defined by the responsible supervisory authority for a minimum of 5 years.


The European General Data Protection Regulation (GDPR) is a strict data protection law in the European Union (EU). It governs managing personal data in the EU and online privacy. The regulation entails substantial changes for companies in recording, archiving, and processing customer data. For example, processing and storing personal data may only take place for the time justified by the dedicated purpose.



The Payment Card Industry Data Security Standard (PCI DSS) is a self-imposed set of regulations assembled by the Payment Card Industry Security Standards Council (PCI SSC). It was created to help organizations that process card payments prevent credit card fraud, hacking, and other threatening security vulnerabilities. All companies that process, store, or transmit payment card data must be PCI DSS compliant. All major credit card organizations support the standard. Muting audio and excluding credit card data input from screen recording is vital to remain PCI DSS compliant.


Turning Compliance Data into Business Value

As you record and document your communications to comply with financial regulations, enormous amounts of data are amassed. This data is a precious resource because it enables comprehensive insights into your customers’ needs, your team’s communication, and potential business risks. This is where using analytics tools in combination with artificial intelligence offers excellent potential for financial service providers. Here are a few ways to get the most out of your data with automated and AI-based analytics processes.


Checking for Compliance Statements

It is possible to verify whether calls contain a mandatory compliance statement. Have the compliance requirements been fulfilled, and has the customer been provided with all relevant information during the call? Do the calls include risky topics or violate compliance specifications? Calls that lack the compliance statement are thus documented in conformity with legal demands.


Automated Categorization

The entire communication is automatically categorized according to its relevance for compliance. This is followed by automated archiving with retention periods that can be defined individually depending on the category.


Documenting Advisor Calls

The transcription of calls enables turning audio content from financial advisor calls to text at the click of a button. For one thing, this is an apt means to preserve evidence to be submitted later in case of litigations; for another, it leads to reduced post-processing time since handwritten documentation is no longer required.


Improved Risk Management

All calls are automatically analyzed for atypical behavior of customers or agents. If a potential risk is identified, financial service providers can react immediately and avert any threats of litigation.


Fraud Detection

Suspicious interactions regarding possible breaches of compliance regulations or insider trading are automatically tagged and reported to the management or the compliance team at an early stage. That way, companies can quickly recognize risks and non-compliant processes and initiate appropriate measures. Fines and sanctions can thus easily be avoided.


9 Features of a Stellar Compliance Software Provider

The content of customer interactions is usually highly sensitive and strictly confidential in financial services. Therefore, recording, archiving, and analytics solutions that meet strict regulations and guarantee data integrity, availability, and data protection, in the long run, are a must.

Specialized software providers offer banks and other financial service companies fail-safe systems to cater to these requirements. Here are some critical compliance features to safeguard financial services communications, ensure compliance, and mitigate risks.


1. Compliance Omni-channel-recording

Companies can record their entire communications – including chat, audio, SMS, screen, and video conferences – in a compliant manner. It checks that every conversation and meeting required to be recorded for legislation and regulatory purposes is captured and tracked from meeting point to storage without exception.


2. Secure Handling of Sensitive Data

Deploying a dedicated data format that cannot be decoded anywhere else but in the provider’s replay applications. And within the replay applications, individual authorization methods further restrict handling. Unauthorized access to data is virtually eliminated.


3. Client-specific Data Encryption

All data is encrypted specifically for each tenant on the system (in compliance with security standards such as HITRUST, SOC 1, SOC 2, GDPR) and saved automatically. By offering the possibility to configure access rights on the tenant level, only respectively authorized users may access the data. The settings should be customized according to individual requirements. Companies can implement encryption keys to administrators and enable key rotation at pre-defined intervals to ensure content remains as secure as possible.


4. Individual Retention Period

Interaction recording software providers should guarantee safety and finer granulation in defining data retention and deletion periods. Data streams from customer interactions must be captured, encrypted, and transmitted to the provider’s recording system, where they are saved.


5. Flexible Recording Rules

Companies should be able to set up different recording rules. Recordings can be started manually, but they can also be scheduled or commenced based on certain rules, so businesses only record specific teams or employees.


6. Resiliency and Availability

Parallel, redundant recording ensures resiliency and the highest availability. Two recording bots are invited to the session when a recording needs to be initiated, as everything is recorded in duplicate. The bots do the recording themselves and transfer the data to a back-end process that encrypts the recordings.


7. Search and Replay

Search and replay functions enable companies to access and replay the latest recordings immediately.


8. Geo-redundant Recording and Storage

Companies can choose the geographic region where their data is stored in the Microsoft Azure Cloud to comply with security standards. Azure is available in 140 countries, offering customers comprehensive compliance and resiliency options.


9. Artificial Intelligence and Analytics

Using AI-based analytics, the solution automatically filters the entire communication for mandatory compliance statements, highlights regulatory content, and alerts risks. This reduces administrative time and enhances audit quality by focusing on relevant content.


Want to learn more about ASC’s compliance software solutions for financial services? Visit our website and contact us today.

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ASC Technologies

ASC is a worldwide leading provider of software and cloud solutions in the field of omni-channel recording, quality management, and analytics. We offer solutions for recording as well as Al-based analysis and evaluation of all communications – with full flexibility as a cloud service, on-premise, or as a hybrid solution. Headquartered in Germany with subsidiaries in 13 countries and experienced system integration partners in over 60 countries, ASC is the #1 Europe-based player in its industry.

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