Cloud computing is an important innovation which can help financial firms comply with new regulations surrounding the storage of mobile conversations, an IT vendor has said.
New regulations from the Financial Services Authority (FSA) mean organisations working in the financial services sector will need to retain more data surrounding trader interactions and for longer periods of time.
According to a report by Ovum, the data retention period could increase from six months to three years, which it said raises questions surrounding data storage and the ability to retrieve this information in a “timely and meaningful way”.
Curtis Nash, chief executive officer (CEO) at Compliant Phones, said that many market participants do not want the hassle of having to manufacture storage facilities to retain this additional data on site.
“There’s a great big capital cost having a box recording downstairs. So why wouldn’t you use the cloud? In the past the problem with cloud has been security but now technology has moved on and there is now much more of an acceptance. But if you’d try to do this two or three years ago, the majority of banks would have not accepted it.”
He said that the importance of effective record management solutions will grow as companies realise that they need to analyse the data rather than just capture the information.
Other incoming regulation on both sides of the Atlantic is also expected to place more emphasis on the collection of data by firms working within the financial services industry.
Nash also said that MIFID II is important from a record keeping perspective. It is expected to prescribe that all European territories should have both voice and electronic records of conversations as part of measures to increase both data transparency and standardisation.
“Similar rules pertaining to record keeping by swap dealers are included in the forthcoming Dodd-Frank act. It shows how the globalisation of consistent record keeping and including voice and all electronic media is now really pushing out and accelerating,” he explained.
However, a recent study by Vanson Bourne and commissioned by Orange Business UK revealed how many of the UK’s financial firms are not prepared for the new legislation surrounding mobile.
Nearly a third of senior IT decision-makers at financial companies were unaware of the forthcoming changes to existing rules. Additionally, 38 per cent were aware that the FSA was planning on making amendments to existing legislation but did not know the anticipated date of implementation.
The Financial Services Authority (FSA), has mandated that participants in the UK’s capital markets must record all conversations of those employees involved in trading by 14 November 2011.
By Jim Ottewill