Business Systems’ Will Davenport gives an expert overview of the Mobile Call Recording technologies available for Financial Institutions
With MiFID II stating the need to keep records of all telephone conversations and electronic communications intended to result in a transaction, even if the actual transaction never materialises; mobile call recording is once again under the spotlight.
In 2009, the FSA (now FCA) enacted new rules requiring financial institutions to record all relevant communications their employees held on mobile phones. However, the technology was not yet at an adequate level which led the FSA to postpone introducing the rules until November 2011. In 2012 there were still complaints from financial institutions about the inefficiencies of the technology.
What problems did the early adopters of mobile call recording face when it was first enforced by the FCA?
There are various different ways of implementing mobile voice recording within an organisation. Historically, it started with application-based solutions. Companies would install an app on their employees’ mobile phones which would then record all inbound and outbound calls. There were several problems with this solution. First of all there were compliance issues in the sense that users could find ways to turn off the app. Second, the technology itself was not very advanced and users would often experience long delays when making or receiving calls which could reach 30 seconds or more. Finally, with the application running in the background, the battery of the phones would drain after just a few hours of operation.
Clearly these problems would not cut it in the world of traders and financial services. This was what I call the 1st generation of Mobile Call Recording technology. At that stage a lot of firms opted for a mobile ban policy purely because the technology was so poor that it just didn’t make sense and was very expensive. As the technology has evolved however, the response of the FCA is that if a firm is going to ban the use of mobile phones by policy, it should ensure that that policy is being actually adhered to. Now if you are a firm, unless you have 24/7 surveillance on your traders, how can you ensure that they are sticking to the rules?
When regulations concentrated only on the actual trades, traders would typically have to be at their desks and therefore they would be using recorded desk phones anyway. Today, with MiFID II and the regulations that are emerging, any communication that could lead up to a trade –any advice or discussion that might end up in a trade, should be recorded. As a result, we are now talking about conversations that can be held outside of the office. These are not trades, so traders do not necessarily have to be at their desks to have a discussion. So we see a massive increase in the need for mobile recording.
What options do financial institutions have today to finally implement a mobile recording strategy without these technology failings?
The first viable approach was introduced by the MVNOs (Mobile Virtual Network Operators), like our partner Teleware, who developed a SIM-based solution that ‘piggy backs’ off major carriers. As a result we actually saw an increase in the number of users, because there was finally a technology in place that worked seemingly the same as a normal mobile, in the sense that it did not have these delays, it was on a SIM which had a number associated with it so people could move their contract and port their number over to one of these MVNOs, and have that number recorded for inbound and outbound calls and text messages.
More recently, the MNOs (Mobile Network Operators) started to release their own mobile recording solution with a set of SIM based offerings and commercial packages that were more aligned with what firms wanted. For example, they wanted to pay typical bundles, like they did with their normal contracts, and simply pay a bolt on fee for mobile recording. And this is why we saw a considerable uptake in mobile recording solutions when they came out from the MNOs, like O2 with whom we also partner. With that being said, the MVNOs responded with their own bundled pricing.
Hosted or on premise?
Both approaches, offer options for a fully hosted model within their data centres and options for on-site mobile recording. There are different mechanisms and ways of approaching it from different providers and at Business Systems we recommend the best fit depending on the firm’s systems architecture, culture, environment, budget and overall needs.
In light of the recent acts, like Data Protection, MiFID II, MAD and MAR, firms are now looking a lot more into incorporating mobile call recording into their on-site call recording estates. The majority already have existing land line and turret recording solutions on-site, within their premises, and without doubt everyone explores the potential to have those mobile recordings also go through their on-site systems, so they can have a single place to replay those calls. Sometimes this can be complex depending on what system they have in place, and Business Systems have options for this where we can provide a portal to replay all your calls whether they will be mobile, homeworkers, traders on the trading floors with cisco phones and turret phones etc. None the less there are these two options –you could potentially have an on-site call recording solution or it could be hosted in the providers’ data centres.
smartnumbers –is it a contester mobile recording technology?
smartnumbers is the newest alternative approach to mobile recording. The software sits on the phone itself regardless of the mobile provider and captures all the inbound and outbound calls and messages to and from the designated number. The benefit is that the user can have one device for both their personal and business number and that the solution can be procured independent of the MNO.
Whereas the two options we mentioned before work with a SIM card that routes the calls through the provider’s cloud where the recording takes place, with smart numbers the recording takes place on the phone and the software then sends the recording to the data centre.
What happens when the user is travelling abroad?
All SIM-based solutions work as long as the user is on a CAMEL (Customized Application for the Mobile network Enhanced Logic). If the user travels to a country that is not on the CAMEL network, the calls he or she makes will not be recorded whereas only those calls received from a ‘CAMEL’ country will be recorded.
This however is not a major issue. From a reporting and compliance perspective, this limitation is acknowledged and the obligation to the user and the firm is to report the calls that were made during the time the user was on a non-CAMEL network.
So which technology should a financial institution choose?
All three approaches have their advantages and disadvantages depending on the specific circumstances of the buyer. Overall, we have done many implementations, both on premise and hosted, and it is always the particular needs of the customer that will define which technology will work best for them.
|Will Davenport has a key focus in the city, working with financial firms to ensure that they have compliant, robust and reliable call recording solutions in place, whether it be on-site phones or mobiles. He also specialises in interaction analytics solutions and legacy replay solutions (replaying calls from end of life systems or tape media) as a way to effectively address the increasing regulatory scrutiny.|