MiFID II countdown: Everything you need to know about call recording retention and retrieval

24 October 2017

With regulators across different markets demanding for increased trade transparency and longer retention periods for call recordings; how can financial firms keep on top of their call recording estate?

Business Systems UK

Not to state the obvious but, it won’t be long before MiFID II comes into effect in January 2018. It’s practically Christmas already.

Data sits at the heart of these regulations. MiFID II aims to improve quality of advice and investor protections, and in doing so requires extensive data recording.

Call recording and retention of calls is no longer a ‘nice to have’, but a serious FCA requirement extended under the financial legislation of the Markets in Financial Instruments Directive (MiFID II).

Firms are required to record telephone conversations and electronic communications that relate to “the reception, transmission and execution of orders, or dealing on own account”. Regardless of the original source, whether it being on a mobile phone, legacy call recording system, cloud based solution or a newly installed recording system, recordings must be stored for at least 5 years, and, where requested by the competent authority, for a period of up to seven years. that allows for the information to be accessible should the competent authority demand it.

According to Article 72, Investment firms must store records in a way that allows for the information to be accessible and retained in a format that does not allow the original record to be altered or deleted should the competent authority demand it. They must also be able to ensure the quality, accuracy and completeness of the records of all telephone recordings and electronic communications.

Longer retention rates create a problem for those firms needing to upgrade their call recording infrastructure. Not only will they have to pay for multiple support contracts across different systems, and in some cases different suppliers, to maintain older legacy systems, they will also need to purchase, install and support the newer ones. In addition, internal staff will also be required to skill up for yet another product to ensure the right calls are easily and quickly accessible in the event of a regulator request.

If you are faced with the challenge of retaining and retrieving calls, there are a number of options available to help you preserve historic call recording audio and data:

Leave your calls in the legacy platform (not advisable)

This is a short-term option. In the long term, hardware or software component failure can lead to additional work trying to retrieve or rebuild your system.

If your call recorder has reached end of life and is no longer supported, adopting this method is risky. If the system breaks, all calls could be lost, with the potential of failing to comply with regulatory mandates or company data security policies.

Migrate recordings to the new platform (better option)

With this option, you’ll have all your recordings located in one place. However, not many systems will allow you to access historical calls, especially if recorded on a system from a different manufacturer to the existing one.

The new system may require the original files to be converted to a standard file format, and careful scoping will be required to ensure data integrity is maintained during the process. It should also be noted that conversion of audio formats can significantly increase file sizes.  

Migrate recordings with an alternate data management solution (better option)

Access old and new recordings, using an alternative replay system that can access existing recordings without having to convert the original format.

A legacy call recording retrieval solution, such as Wordwatch, can ensure the long term retention, retrieval and replay of past and current audio files, via one centralised access portal. As a standalone portal, Wordwatch can access and replay legacy audio files while maintaining call metadata and integrity from multiple recording systems, as all calls remain on the original file structure and format (there are even processes that can be added to retrieve and migrate from removable media, such as, DAT tapes to online storage).

This means compliance and IT teams can efficiently search, extract and playback audio recordings from multiple legacy and live call recorders, regardless of manufacturer or location. It also means that end-of-support and end-of-life issues will not impede their call recording infrastructure and assets.

There are certainly great benefits to be gained when adopting a more streamlined approach and simplifying an organisation’s call recording infrastructure using a single portal to access everything. Not only is less internal resource required to manage and maintain user requests for support, less budget is required to support multiple systems, resulting in substantial overall savings.

In a world where technology is advancing at phenomenal pace, it certainly makes sense to look at where technologies can be streamlined and simplified freeing up your time to look at the really important stuff instead.

For more information, read our guide Extracting Calls from Old Call Recorders Checklist.

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