Is your business FCA regulated? Do you have responsibility for overall risk management and compliance? Perhaps you have a team of voice traders and wealth managers. If that describes you as a business manager, then chances are that you should be very concerned. However, if you work in Compliance, Risk or Internal Audit, those business concerns could be a source of easy, high impact wins for 2014.
Compliance might do well to look closely at that IT team usually called 'Voice Infrastructure'. Have you ever wondered what they actually do? It is often a bit of a mystery. So then how transparent do you think Voice Infrastructure teams really are on the day-to-day management of high impact IT compliance risks? I am referring to the sort of risk issues and supporting evidence that become highly visible in scandals such as Libor.
Internal Audit is coming under pressure to demonstrate more and deeper coverage in wider areas. The Chartered Institute of Internal Auditors (CIIA) issued guidance on seven areas that should be focused on, including trading and IT.
For decades, Voice Infrastructure has thrived in the twilight, perhaps using technical jargon and assurances to stay safely shielded from the prying eyes of Compliance Officers and Internal Auditors. A key part of their responsibility is to handle the black art of making sure a trading floor has reliable connectivity. They should also ensure that traders' communications are recorded compliantly and made easily accessible for investigators and regulators.
Voice Infrastructure teams are often good at running IT 'boxes and pipes'. Data governance and its impact on an organisation's compliance status may be quite new to them. For a number of years, the FSA/FCA has been issuing Policy Statements focused on improved governance and transparency in IT and communications, e.g. PS 01/08 and PS 10/17. On a wider scale, MiFID II will drive far greater requirements of transparency from IT.
Would a typical Voice Infrastructure team really be keeping up with requirements of complex regulatory changes? Probably not. If your Voice teams do have their compliance bases covered then they would be seen as exceptional.
A compliance team looking to get quick wins from wealth management and trading floors would do well to focus their efforts on the Voice Infrastructure area. This will shine some light onto how recording takes place, what gets recorded, whether the systems in use are properly maintained and supported, how IT manage legacy recording files, how good their search and retrieval capabilities are and whether any false economies in IT are raising the overall risk profile (e.g. recording multiple traders simultaneously on a single recording channel or running critical equipment without long-term vendor support).
This could be a good year for Compliance and Internal Auditors.
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