Call Recording for Mobiles in Financial Services Companies – Laying Down the Law

Financial companies have long since had to record all phone calls from landlines, but new regulations from the Financial Services Authority (FSA) could see call recording used for mobile phone calls – and then stored for six months.

From March 2009, firms have had to record all telephone conversations and electronic communications relating to client orders and the conclusion of transactions in the equity, bond, and derivatives markets.

By law financial companies have to record email conversations and phone calls from fixed lines however, mobile phone calls were previously exempt from this regulation as the technology simply couldn’t handle it. Now, the technology is well able to record mobile calls. The FSA is currently holding a consultation before deciding to include mobile calls into the rules.

The FSA consulted on the taping rules last year, with them completing a further review of the cost-benefit analysis and discussing with the industry the scope and practicalities of the possibility of recording on mobile devices, both corporate liable and personal devices.

It is expected that recording mobile conversations will become mandatory to close a potential loophole in the FSA’s current taping framework. The FSA believe that if they were to keep the mobile phone taping exemption, those wishing to circumvent the rules have incentives to move ‘relevant conversations’ on recorded fixed lines to unrecorded mobile phones.

This undermines the taping regime’s effectiveness. Therefore, removing the exemption, it is believed, will contribute to achieving the economic benefits as follows: recorded communication increases the probability of successful enforcement; and this reduces the expected value of exploiting private information and hence reduces insider trading.

This, in principle, leads to increased market confidence and greater price efficiency.

The latest reports on this subject for the FSA found that the overwhelming majority of firms in the financial services sector did not employ mobile recording solutions. In the period since the exemption was created, most firms had done little to prepare for mobile recording, preferring to wait until the FSA requires recording from mobiles before implementing a solution.

However, several authorised firms and suppliers have indicated that the level of interest in mobile call recording is now much greater than ever before in the financial services sector. Several authorised firms have requested detailed pricing and technical proposals from suppliers and have discussed in detail how mobile recording technology might be integrated with their existing communications and recording solutions.

The supply side for mobile call recording has also evolved somewhat. In particular, the largest provider of cellular services to City financial firms and the largest provider of managed trading turrets to the financial sector have both signed deals to distribute the same company’s mobile recording solution in the UK. Although neither the cellular operator nor the provider of managed turret services has yet signed a deal within the UK financial services sector, both companies appear confident in the reliability and scalability of the underlying technology.

Why is this issue of interest to mobile managers? It is not typically their remit to concern themselves with FSA compliance issues?

It is likely that suppliers will provide workable and scalable solutions to record accurately voice, sms, mms, and email activities against a particular cellular number. The raw call files and billing data from the airtime carriers and recording technology from specialist suppliers will integrate nicely to tag a call made at a certain time, from a certain number, whilst recording its content.

However it is likely that there will be a requirement to store the data and calls for at least 6 months, possibly more. The storing in itself is not an issue, with the voice files, text transcripts and other data being stored more than likely via a 3rd party data storage solution.

The problem however escalates when you add into the mix the general complexities of managing mobile fleets. In any given 6 month period in any large organisation there will be a multitude of changes driven by people leaving the organisation, people starting with the organisation, numbers being recycled between individuals and projects.

The challenge will therefore be not relating the content recorded in a call to a specific time, and a specific number, but having the data on who held that number at that period of time. If the numbers are recycled and reused in the organisation, if the caller has since left and a new starter been issued the number, then this must also be logged. There is a requirement for a robust and approved solution for attaching the mobile number to an individual in that same time period.

This is an issue neither the call recording providers, nor airtime providers are likely to be able to help with. It is a database management issue and a mobile management issue which organisations will need to address and become comfortable with their solution. It could be solved internally utilising database tools and internal resources, or could be outsourced to a management company providing mobile management solutions.

This is not a typical wireless expense management issue, it is not telecom expense management, it comes down to process management, and ensuring the recording solution chosen, the airtime carrier, and this specific process can all work together. Getting any component piece of the solution wrong may lead to great inefficiency when locating the correct data, inaccuracies in personnel allocation, and worst case a compliance issue with this FSA legislation carrying heavy fines for individual organisations.