Monitoring conversations to drive value and compliance

Why do finan­cial ser­vices firms need to wor­ry about com­pli­ance in com­mu­ni­ca­tion?
I used to work in the finan­cial ser­vices sec­tor and saw a lot of com­plex prob­lems first-hand. Trad­ing floors are quite eas­i­ly the most inef­fi­cient work­ing envi­ron­ment on the plan­et, and despite hav­ing instant access to glob­al mar­kets and vis­i­bil­i­ty of what was going on in the out­side world, com­pa­nies are often blind as to what’s going on inside their own firm.

For exam­ple, when I was a trad­er, part of my job involved fly­ing around the world, restruc­tur­ing deals for clients. But as far as my firm was con­cerned, because I was work­ing away from my desk, I wasn’t com­pli­ant. Of course, that was very frus­trat­ing.

With the intro­duc­tion of more reg­u­la­tion after the finan­cial crash, I realised that many firms don’t have any tools to man­age vis­i­bil­i­ty and risk, which increas­es lia­bil­i­ty for indi­vid­ual traders, and the rep­u­ta­tion­al risk to each firm.

VoxS­mart was cre­at­ed to help firms build a view of inter­nal risk, par­tic­u­lar­ly risk deriv­ing from employ­ee-client inter­ac­tions through email, instant mes­sag­ing and tele­phone calls. regtech like ours helps to pro­tect employ­ees and firms when mis­takes hap­pen. We approach this from a posi­tion of pro­tect­ing the good guys, not hunt­ing down the bad guys.

Does regtech help firms to avoid risk, or can it also dri­ve val­ue?

It’s about both. Risk is an inher­ent part of the indus­try, so we def­i­nite­ly want to reduce and mit­i­gate risk. But those con­trols can also con­tribute to effi­cien­cy and rev­enue growth, which is crit­i­cal to both traders and finan­cial insti­tu­tions.

The trad­ing oper­at­ing mod­el is very inef­fi­cient so it’s 100% prob­a­ble that you’ll miss some­thing at some point. How are you going to make sure that doesn’t hap­pen? Regtech can mit­i­gate human error and pro­tect employ­ees when mis­takes inevitably hap­pen.

As soon as you’ve har­nessed that data, it can be used to dri­ve val­ue, mov­ing beyond sur­veil­lance to deliv­er insights that could reduce P&L or opti­mise trad­ing strate­gies, for exam­ple. The val­ue of data to finan­cial insti­tu­tions is huge and large­ly unre­alised to date.

How will the growth of cyber cur­ren­cies affect how we use regtech?
Our tech­nol­o­gy plays a huge role in the cyber cur­ren­cy space. We already have sev­er­al clients in that space and as large glob­al firms and retail banks adopt cryp­tocur­ren­cies into their finan­cial offer­ings, the need for trans­paren­cy into these trades is going to increase.

Cyber cur­ren­cy can only remain large­ly unreg­u­lat­ed for a short time, and there are pend­ing reg­u­la­tions in mul­ti­ple coun­tries. We were recent­ly approached by the world’s largest cryp­to exchange to build a capa­bil­i­ty to mon­i­tor Telegram com­mu­ni­ca­tion ahead of upcom­ing reg­u­la­tion. That has meant that all of our 100-plus clients now enjoy the ben­e­fits of that new tech­nol­o­gy offer­ing.

Why have so many finan­cial insti­tu­tions been rel­a­tive­ly slow to inno­vate how they man­age risk?

It has been slow of course, but I think the sit­u­a­tion is chang­ing. Com­pe­ti­tion encour­ages inno­va­tion, and what cryp­to has done is intro­duce a new dimen­sion of com­pe­ti­tion that has encour­aged greater agili­ty among tra­di­tion­al finan­cial organ­i­sa­tions.

Larg­er organ­i­sa­tions face mul­ti­ple chal­lenges that slow down the rate at which they adopt new com­mu­ni­ca­tion chan­nels but using regtech like VoxS­mart does let them play catch-up in their own time. Tech­nol­o­gy evolves con­stant­ly and firms need regtech to enable change and inno­va­tion in a com­pli­ant way that helps them future-proof sys­tems and process­es.

What do you see as the main dif­fer­ences between chal­lenger fin­tech brands and more estab­lished finan­cial insti­tu­tions?

We sup­port the entire ecosys­tem of finan­cial mar­kets, so that includes new entrants and tra­di­tion­al play­ers. With new cryp­to exchanges, we see more use of new chan­nels such as Telegram or sig­nal, which are pos­i­tive­ly influ­enc­ing tra­di­tion­al mar­kets. We often find our­selves advis­ing firms on future com­mu­ni­ca­tion trends. Dur­ing the pan­dem­ic for exam­ple, we saw that com­mu­ni­ca­tion in the indus­try switched to What­sApp almost overnight. Since What­sApp record­ing is a core offer­ing for us, we were able to be there for larg­er clients who were fac­ing a mate­r­i­al shift in employ­ee behav­iour.

In a sec­tor where we’re only just scratch­ing the sur­face of the many appli­ca­tions and ben­e­fits regtech can have, we encour­age firms to be inquis­i­tive and open-mind­ed about new tech­nolo­gies like mon­i­tor­ing and ana­lyt­ics, and to think longer-term about the poten­tial val­ue they can bring to the busi­ness.

What do you think is the biggest regulatory/compliance chal­lenge that the invest­ment bank­ing com­mu­ni­ty is fac­ing in 2022 and why?

Some­body once told me that banks don’t man­age mon­ey, they man­age data.
The biggest chal­lenge for the indus­try right now isn’t just mon­i­tor­ing the data, it’s about under­stand­ing the data. Because once you have cracked the mon­i­tor­ing, that’s almost like your check­box ticked for reg­u­la­to­ry com­pli­ance. But if you under­stand the data you are mon­i­tor­ing, then you can start adapt­ing your busi­ness based on what you know, what the data is telling you. You can under­stand trends, you can under­stand insights, you can help your clients in a total­ly dif­fer­ent way and be so much more effi­cient once you achieve that.

For more infor­ma­tion, vis­it voxsmart.com

Pro­mot­ed by VoxS­mart