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New regulatory requirements put digital communications apps under closer scrutiny

Financial Services Risk Image - group of business people  looking at documents on a table.Customer protection and modernization are at the top of the Securities and Exchange Commission’s (SEC) agenda for 2022 and beyond. With the COVID-19 pandemic’s impact on remote work, a new emphasis on compliance for digital communications will affect every financial services firm and bank.

That can have a big impact on enterprises, because in only the past year, Teams usage has increased to more than 150 million monthly active users. That’s why Microsoft and the compliance experts at Theta Lake are working to provide extended compliance and security through Microsoft Teams with their Security and Compliance Suite and Theta Lake Realtime Compliance Advisor.

Regulators work to stay ahead of innovation and change

From a practical standpoint, the growing use of digital communications applications such as Teams poses new functional and regulatory challenges. For example, the SEC recently made clear in an enforcement action against a global bank that investment brokers have a high standard to meet in terms of recordkeeping obligations—a standard the firm fell short of when some of its employees discussed business matters on personal devices. Subsequently, on the heels of the enforcement action US Regulators have launched a broad investigation over other global banks misuse of messaging platforms. 

“As technology changes, it’s even more important that registrants ensure that their communications are appropriately recorded and are not conducted outside of official channels in order to avoid market oversight,” said SEC Chair Gary Gensler of that case.

As Gensler made clear, baseline compliance will no longer suffice to comply with SEC regulations. Firms must take a more nuanced approach to consider the potential risks associated with using each feature of a communication platform to ensure that deployment aligns with the anticipated needs of examination and investigation teams.

How technology can help with compliance

The challenge for regulators is that tools such as Microsoft Teams allow much richer and complex communication than email or instant messages. Screen shares, file transfers, chat, webcams, whiteboards, and even emojis and animated GIFs are changing the SEC and other global financial services regulators’ conceptions of electronic communications that are subject to retention and oversight.

“Microsoft and Theta Lake are in lockstep with these developing regulatory requirements,” says Sandeep Mangaraj, Industry Executive for Banking at Microsoft. “Microsoft Security and Compliance Center features such as DLP, eDiscovery, Information Governance can be implemented to align with regulatory expectations.”

Theta Lake’s product suite uses multiple Microsoft APIs to provide extended compliance and security for Microsoft Teams. Their comprehensive capture capabilities include Teams channel messages, group chat, and one-to-one chat. Additionally, as a Certified Partner for Teams Meetings Compliance Recording, Theta Lake provides full recording, capture, and archiving of voice calling and video meetings along with in-meeting chat.

“Theta Lake’s context-specific risk detections span all of Microsoft Teams’ productivity features, allowing financial services firms to deploy Teams at scale and anticipate these emerging challenges of new modes of communication emphasized by the SEC,” says Suhail Nimji, VP of Strategic Partnerships, Theta Lake.

Time for a long-term strategy

Even once the COVID-19 health crisis wanes, enterprises will continue to use today’s modern productivity and communications tools. People like the dynamic and interactive features of these modern communications tools, especially the flexibility they offer. What’s called for now is a long-term strategy to meet regulatory scrutiny while still giving the workforce the best possible work environment.

Microsoft and Theta Lake are prepared to help companies manage that scrutiny securely and effectively, analyzing all their data – structured and unstructured – to ensure compliance.

To learn more about Theta Lake’s Security and Compliance Suite, visit the Azure Marketplace.