The FCA’s recent policy statement on Mifid II, outlining the final rules of the regime, saw much of the confusion around conversation recording largely clarified.
Article 3 firms, including advice firms and corporate finance boutiques, now have the option to take detailed notes of a call rather than have to record it.
However, firms should consider the following wider benefits of conversation recording when evaluating whether to adopt this approach, regardless of Mifid II exemptions:
1. Greater certainty and protection
Whichever approach firms opt for, this will need to be applied consistently across the whole business. Taking a blanket approach of recording all calls is the most effective method of accurately documenting all relevant conversations and compliance with record-keeping requirements.
Recordings should be stored confidentially, in a durable medium, and tagged with searchable data-points to ensure they are easily accessible. This provides an objective, end-to-end view of client discussions and an extra layer of reassurance for all parties.
2. Valuable insight
Despite initial financial outlays, recording technologies can provide valuable insight if firms harness the power of the data derived from the relevant conversations. This data can be used to inform risk management processes, improve controls and governance and increase efficiencies to reduce costs.
3. Competitive advantage
Recordings also hold a wealth of customer insight, such as demographics, risk appetite and customer sentiment. This can be used to drive better product design and a more customer-centric culture, giving firms a competitive edge over those that do not invest in similar technologies.
Phil Deeks is technical director at TCC