Firms are concerned about mobile communications, and with good reason

Mobile devices enable communications to happen anywhere, and compliance is failing to supervise and retain all messages sent on the go, particularly text messages.

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Mobile
usage
statistics

of American adults own a smart phone of some kind.

of smartphone owners use text messaging.

of employees have requested to use text/SMS for business purposes.

of firms allow their employees to use text/SMS messaging for business.

Top mobile/text messaging concerns

Mobile communications devices were identified as a concern by 50% of 2017 survey respondents — more than double than in 2016.

2016 23%

2017 50%

Where do mobile/text communications rank overall in e-communications compliance concerns? (pick one)

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How are firms handling mobile device use?

    Personal and corporate-issued devices are allowed

    Only corporate-issued devices are allowed

    Our company does not issue mobile devices. Employees use their own

    I don’t know

    How do firms justify not archiving text/SMS messaging when they allow it for business?

    42

    %
    No one at my firm actually uses this channel for business communication
    33

    %
    We can handle our retention / oversight needs for this channel without additional technology
    25

    %
    Waiting for regulators to enforce regulatory guidance before we archive it

    Not supervising mobile?

    Expect to be fined.

    In December 2016, FINRA censured and fined a Georgia firm $1.5 million, in part, for failure to retain approximately one million text messages sent using firm-issued devices. The firm had a policy of prohibition, which certain employees violated. Regardless of the policy, FINRA found the firm in violation of its requirement to preserve all business communications.

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    More notable fines from 2016

    In March 2017, FINRA fined and suspended a Texas broker for one month for unapproved securities-related communications with two customers via text message, violating the firm’s Written Supervisory Procedures (WSPs). The firm did not capture, review or retain the broker’s text communications.3

    In December 2016, a New York advisor was fined and temporarily suspended for using a mobile phone to communicate with customers via text message without the firm’s knowledge. The firm did not review or retain any of the text messages.4

    In November 2016, a New York advisor was fined and given a 60-day suspension for using text messaging on a non-firm-issued smartphone to exchange business related messages with a customer, in violation of the firm’s policies. This use of text messages caused the firm to fail to retain those communications and undermined the firm’s ability to supervise the advisor’s communications with a customer.5

    Get Ahead of the Game – Download the Full 2017 Electronic Communications Compliance Survey Report

    Don’t get swept up in the growing number of FINRA and SEC regulatory actions. In our full survey report, you’ll learn about common compliance gaps, what regulators are looking for, and how other firms are managing the challenges of supervising new communication channels.

    Read the Full Report
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