by Adam Woozeer

Financial services firms and institutions are inherently risk-prone. They handle high volumes of sensitive data, and the very nature of their activities exposes them to a variety of risks.

And though regulations, rules and laws are designed to protect consumers, the sheer pace and scope of regulatory change means financial services are constantly adapting in order to remain compliant – often at a very high cost that eventually gets passed down to consumers.

But you can minimize your costs and reduce compliance risk with call recording. Simple things like recording interactions in a single platform, automatic transcribing and streamlining analytics help to simplify your business process and reduce your investment in compliance technologies. And when it comes to managing compliance, every win counts.

1.   Reduce conduct risk

Since 2008, the Securities and Exchange Commission (SEC) has been addressing the misconduct ‘that led to or arose from the financial crisis’.

Financial institutions that knowingly concealed from investors the risks, terms and correct pricing of complex structured products have been the recipients of enforcement action and penalties, resulting in over $3.76 billion in penalties distributed. Meanwhile, other regulators have also pursued action and issued fines for other forms of misconduct, including fraud and predatory lending practices.

Conduct risk has quickly become the focus of key regulators in the US who, according to Accenture, are beginning to advance new conduct regulation in the financial services sector:

Systematic failure to provide correct information or reliable advice constitutes poor conduct, and poor conduct exposes your business to compliance risk and potential legal action. According to KPMG, the leading causes of poor conduct (and conduct risk) include information asymmetry and internal communications failure, lack of governance and poor culture.

These are all risk factors that a unified communications platform can alleviate. You can reduce compliance risk with call recording as it enables you to:

  • Maintain a global view of your communications and interactions with customers
  • Investigate voice and text interactions so you can have better insight into your operations
  • Enforce policies, standards and quality controls
  • Transcribe and audit conversations for use in staff training and development

2.   Improve data integrity

You don’t have to think long and hard to grasp the full impact of inaccurate or ‘bad’ data. Just think about how much mail goes undelivered each year because of poor data entry and labelling on envelopes.

Data (and how you manage it) impacts your business’s most important stakeholders: your customers. So investing in data governance is essential. It will save you money in the long-term and reduce the risk of non-compliance and regulatory fines.

Call recording and archiving enables you to implement a better data governance strategy (and therefore reduce compliance risk) because it:

  • Improves the monitoring of your call records by allowing search across voice and text-based conversations, filtering by dates, user, device or media type
  • Capture and analyze all transmissions into one unique global platform, so data isn’t ‘siloed’ in different databases and departments.

If you improve the integrity of your data with call recording, you’ll inevitably improve other business functions too. You can provide a more personalized service for your customers, implement process improvements and facilitate training programs – all of which reduces your conduct risk, and your exposure to compliance risk.

3. Systematically report on compliance efforts

In the finance industry, any particular event or action is likely to be regulated by more than one agency. This is because financial institutions are subject to institution-based regulation, while their activities – trades and transactions, for example – are subject to activity-based regulation.

To make it easier to manage financial sector risks as a whole, the Dodd-Frank Act created the Financial Stability Oversight Council (FSOC). The FSOC has a permanent staff and coordinates the efforts of various financial regulatory agencies.

The dispersed (and somewhat fractured) financial regulatory architecture is why it’s important to report meticulously and accurately on your compliance efforts. If you’re ever questioned about your conduct or business activities, you need to be able to draw on your call logs and documentation to:


  • Easily counter claims of regulation breach
  • Prove that incidents of non-compliance are isolated – not systemic – failures
  • Reduce your systemic exposures to compliance risk


Call recording makes it easier to produce accurate records that prove your business is compliant and operating within regulatory standards. With a unified communications archive, drawing on your call logs, transcripts and reports is so much easier – thus reducing your compliance risk.

Reduce the cost of compliance efforts

According to research by Thomson Reuters, the growing need for more specialist compliance staff (along with the sheer pace of regulatory change) is increasing the cost of compliance for organizations. More than 60 percent of firms across the world are expecting an increase in their compliance budget over the next twelve months alone.

The efficiency gains and process improvements that can be achieved with call recording can offset the costs of compliance-related investments, such as new staff and training programs. For example, you can use call recording to:

  • Reduce the amount of software and hardware you need. Unified, cloud-based call recording platforms can record conversations across multiple channels, operators and territories all in one place.
  • Eliminate the need for manual transcribing. Call recording platforms should be able to transcribe your voice communications for you, making it easier to search transcripts.
  • Streamline your analytics. Platforms like Cognia have built-in speech analytics and optimized search, removing the need for separate analytics software (and saving you time in the process.)

Switching to a cloud-based call recording platform helps reduce the cost of compliance – and therefore compliance risk – because it’s often cheaper than on premise alternatives. Instead of covering the high up-front costs of inflexible on-premises systems, you can implement a cloud-based call recording service on a pay-as-you-use model.

4.   Reduce regulatory fatigue

Keeping up with the sheer pace of regulatory change can be a challenge, especially in the financial services sector.

But a unified communications platform can help you here too. A platform like Cognia gives you the ability to control how your data is recorded, archived and accessed according to departments or data type. You can even define the configuration elements like routing, storage locations and encryption.

Implementing these kinds of controls allows you to meet the diverse and ever-changing local, regional and global regulations without sacrificing department autonomy or process efficiency. It also makes it easier to automate manual tasks like transcribing and reporting, so that you can focus on bigger things and adapt to changing regulatory requirements faster.

Try it today: reduce compliance risk with call recording

Compliance matters, especially if you have operations in multiple locations and jurisdictions. And though keeping up with regulatory change can be time consuming and costly, call recording can make light work of some of the complex compliance and risk management activities that need to happen in your business.

So give it a try. Your organization (and your customers, and your legal team, and your P&L) will thank you.


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