Is your business MiFID II ready?


The Challenge at hand:

From January 2018, MiFID II legislation impacts any business involved in the advice chain for intended trades. They must record and retain records of their communications for at least five years.

The Markets in Financial Instruments Directive (MiFID II) is new EU legislation.  It is aimed at regulating firms that provide services to clients linked to ‘financial instruments’.

MiFID II regulation is the most radical overhaul of regulatory legislation in the financial services sector for over a decade. Complying with the MiFID II directive on recording voice and SMS communications will avoid risking fines, penalties and reputational damage.

You must be able to:

Record telephone calls, mobile calls, SMS and electronic communications.

Keep records for five years.

Advise clients you are recording their calls and provide them the recordings if they ask.

This will include all communications where you intend to instigate a trade or provide a service.

Key considerations:

Relevant conversations include internal calls where they relate to a significant conversation

The need to record relevant conversations and communications including investment advice. These may result in the reception, transmission or execution of client orders

Face-to-face conversations with a client and their content need to be recorded.  These can be recorded via written minutes or notes.

This will have a significant impact on the fixed line and mobile call recording systems such businesses currently deploy.  So the scalability of the system and databases will also be a major factor

The implications of the new MiFID legislation on phone systems and mobile networks extend beyond just cost:

Storage: MiFID II requires all recorded conversations to be stored for 5 years. Companies will need a system with substantial storage capabilities to comply with this.

Security: Storing such a large amount of data safely and securely will be a challenge to traditional storage solutions. Firms will also face customer concerns over security and confidentiality when recording their calls.

Retrieving data: Legacy solutions do not support smart searching, making it almost impossible to locate a certain part of a certain call within a store containing 5 years of recorded data.

Implementation:  Legacy call recording solutions require hardware installation, the costs of which are generally very high, requiring expert personnel, software licenses and the hardware itself.

Operational and organisational consideration: Employees working from home will need to ensure their calls are still recorded on their domestic, mobile or VoIP lines.

Cost: The need to store all recorded conversations for five years will require a system that is cost effective and staightforward to implement.

Potential ways forward:

All firms who are new to a call recording requirement, or that need to upgrade their existing platforms, will need to implement a recording solution that is secure, cost-effective, easy to implement, easy to use, offers near-unlimited storage and has the ability to record calls on demand. It will also need be able to record across individual phone lines, PBX systems, VOIP, mobile phones, remote workers and audio conferencing technology.

Legacy solutions require on site hardware, which prevent the call recording solution from providing all of these requirements.

Cloud-based recording and archiving solutions do not require significant on-site installation, minimising cost and disruption incurred as a result. Cloud-based recording and archive solutions provide the ability to access call recordings and archives from anywhere, at any time via secure online portals. This is particularly beneficial to organisations working over multiple sites or even countries.

In summary, MiFID II will cause many companies to carefully consider their call recording strategy. Dont get left behind, contact Juno for advice and guidance on the latest compliant call recording solutions


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