Bracing for MiFID II: How to Use Call Recording to Get Ready
There's a new regulatory firestorm coming in, and it goes by the name “revised Markets in Financial Instruments Directive,” or MiFID II. While it won't actually go into effect until January 2018, smart businesses are getting ready for its impact now, because this is a development that's going to shake up a lot of the field. So how can a business get ready for this new regulatory environment? Call recording tools can play a big part, and help a business get along nicely with MiFID II.
First, a look at what MiFID II actually is: it's a new regulatory matter designed to improve transparency into business operations, thus allowing for greater financial stability by making it clear to those who care to look that businesses aren't engaged in various shady dealings like we've seen over the last 20 years or so. Geared mainly toward those companies offering financial services and accompanying advice, it requires said firms to be more open about dealings, and that means more call recording.
Under earlier guidelines, recording phone calls was limited to those who were directly involved in trading. Now, with MiFID II, reports note that “anyone involved in the advice chain that may lead to a trade” is now part of the group that must record conversations. That's everyone from a retail bank manager to wealth managers. For the United Kingdom, this may take the number of those falling under MiFID II's purview from about 30,000 traders to upward of 300,000 individuals. What's more, those calls must be stored for an even longer time than before: five years instead of six months.
This means many more people recording many more conversations and keeping these recordings far longer, which is essentially like setting up an all-you-can-eat buffet for hackers. MiFID II has also accounted for this, demanding more data privacy as it comes into play at the same time as the General Data Protection Regulation (GDPR) in the European Union (EU). Replacing an act from 1998, the GDPR includes huge new fines for data misuse, including up to four percent of the total turnover.
So how can a company respond here? Call recording tools are increasingly available for mobile devices and for fixed-line phones. Since many firms are moving to voice over Internet protocol (VoIP) service anyway, and routing many calls through a computer, it's much more possible to include call recording mechanisms accordingly. There are plenty of call recording systems out there, too, so a wise company can start evaluating the various options now to produce a solid solution in the end.
While much of this is limited to the EU in scope, it's also not a bad idea for other firms to look into call recording as a protective measure. Those with questions should consult an attorney, but as a general statement, call recording can be a valuable legal protection tool most anywhere in the world.
Edited by Alicia Young