Finserv Blog Post #2- Electronic Recordkeeping in the Era of Mobile Devices: Staying ahead of FINRA and SEC Regulations

Electronic recordkeeping in the era of mobile devices: staying ahead of FINRA and SEC regulations.

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Katherine Hill, Head of Financial Services Vertical Marketing, T-Mobile for Business

Electronic communications are critical in meeting customers' needs and facilitating securities transactions. However, employees can violate electronic recordkeeping requirements without the appropriate controls and technology.

Given the likelihood of ongoing regulatory enforcement and fines, compliance with the recordkeeping requirements, including the 1934 Securities Exchange Act and the 1940 Investment Act, must be a top priority for financial institutions.

The fines and penalties associated with recordkeeping violations can provide an unnecessary source of embarrassment, which can be particularly damaging when trust is such an important factor in financial markets. Enforcement activity can also compel financial institutions to hire additional compliance staff to mitigate the risk. And while harder to observe and quantify, attracting regulatory oversight can impact a financial institution’s reputation and stock price.

Simply put, non-compliance can be costly and distract an institution from its primary mission.

Customer preferences

Customers expect to communicate on their terms.

While the recordkeeping requirements are demanding, customers, such as high net-worth clients, expect to communicate in a manner that is convenient for them and not just the firm. Employees and customers often find third-party messaging and communication apps more accessible than traditional communication channels.

Compliance is often an afterthought for employees facing unrelenting pressure to meet their customers' needs. Violations occur when well-intentioned employees put customers' communication needs and preferences first.

Even though some firms create stringent policies governing employee communications with customers, they need technology to uncover and correct violations.

Convenient compliance

Achieving compliance without alienating customers.

Compliance does not have to be an inconvenience. Innovative technology can allow customers and employees to interact without triggering a regulatory violation. Such technology enables employees to use a single smartphone for personal and business communications. Employees can call, text, or engage with clients using communication platforms like WhatsApp without exposing financial institutions to regulatory risk.

Whether employees use a personal or a company-issued device with the right solution installed, there is an archive of calls, texts, and messages to satisfy electronic recordkeeping requirements.

Should a client-facing employee leave the institution, a complete, accurate, and easily accessible repository of client communications can streamline the transition process and minimize the impact on the customer.

Behind the scenes, technology can provide the compliance department with reporting to demonstrate compliance. Additionally, the IT department can apply updates to ensure compliance as the regulatory environment changes.

Technology solutions

A sustainable and scalable approach to electronic communication recordkeeping requirements.

Electronic recordkeeping requirements present numerous challenges, and there can be a lot of direct and indirect costs for non-compliance. Solving the problem by increasing the compliance staff is costly and unsustainable, especially as the volume of electronic communications grows exponentially.

Prohibiting preferred communication channels in the name of compliance is also counterproductive, as it creates an unnecessary wedge between employees and their customers.


Automating the process and embedding your communications policies in a technology solution reduces the compliance burden placed on your firm. It also facilitates free-flowing communication between customers and employees, solidifying relationships and increasing the customer's lifetime value.

At T-Mobile for Business, we’re focused on providing your business with connectivity solutions and the dedicated, exceptional service you need to help you stay ahead.

About the author:

Katherine Hill.
Katherine Hill has over 20 years of experience in the financial services sector, including work with banks, brokerages, and investment managers. Her consistent business focus is driving growth and reducing risk through better technology.

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