In March, Smarsh released an infographic that warned us about the risky business of social media within the financial industry. It recently released its 2012 Electronic Communications Compliance Survey, which continued to outline the challenges facing financial services when it comes to online communications. However, it seems as though in some areas, they are beginning to adapt and adopt.

A Changing Media 

The financial industry is changing, independent of social, digital and mobile media. Try as they might, online communications can’t be ignored and the risks they bring have to be addressed. In fact, the study showed that the compliance burden shows no indication of abating, with 60.1 percent of survey respondents reporting an increase in resources (time and/or money) spent on electronic message compliance in the past year.

As online communications evolves and expands beyond what has become traditional platforms and media, the financial industry, among others, is being challenged to adopt and adapt to keep up with the expectations set forth by its customers, employees and society. Needless to say, the increase of mobile business communications over the last several years has created new challenges and risks for IT and compliance managers.

A Changing Industry

In 2011, FINRA issued Regulatory Notice 11-39, stating that firms are required to retain, retrieve and supervise business communications regardless of whether they are conducted from a work-issued device or a personal device. As such, firms should have the ability to separate business and personal communications on devices in order to ensure that business communications are readily retrievable, and should address the retention, retrieval and supervision of these messages via policy.

How have these mandates affected the industry? Over the last year, firms have made significant increases in the number and variety of mobile devices allowed on the network, as well as in the number of firms that allow multiple devices for business purposes. Smarsh found that more than half of firms allow iPhones, iPads, Android phones and tablets, as well as Windows Phones, on the corporate network.


However, more devices create more concerns about compliance. Sixty-three percent of respondents stated that meeting compliance obligations related to these communication devices is a top three compliance concern. And yet, while the majority of financial services firms allow these devices on their corporate networks, archiving and supervision practices from these devices lag behind those in place for laptops and desktop computers.

More Social Media, Despite Fewer Archiving Actions 

Considering that it’s been around the longest, social media is starting to seep deeper into financial industry operations. The study showed that more and more firms allow employees to use social media networks, and those that aren’t are taking steps to formalize their position.

Additionally, firms are developing written policies to address social media use and reduce risk, with the number of respondents reporting that their firm has a policy in place increasing significantly over the year prior. And yet, despite these advanced, the findings still show that when it comes to putting archiving and supervision systems in place for social media, most firms have not taken action.

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All in all, this study shows that the financial industry is trying to keep up. Being able to move beyond denial and into acceptance is huge, but it doesn’t make compliance so. It requires hard work, dedication and a changing culture that can readily support the rapid speed at which media and mobile is moving.