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Does a client want It?

But the real exam question is, can you give your clients what they want but give the financial regulators what they want, too – and not pay a fortune to do so?

The short answer is, “Yes. You can.” The longer answer is a little more complicated.

Although clients are shifting away from email (remember receiving printed brochures in your mailbox?), most of them still want some way to be able to connect with their financial advisors and planners. SMS text, whether it’s by messaging, DM’ing on Instagram, or on WhatsApp, is up to individual preference, but it’s decreasingly via email.

That’s an easy shift for clients to make – but it’s not so easy for financial firms. an eMail was a nicely controlled and known mode of digital communication. Thousands of tools (off-the-shelf and legacy home-grown varieties) exist for the sole purpose of monitoring, archiving, and reporting non-compliant conversations. Easy.

Employers need to embrace the shift towards SMS. That doesn’t mean that they need to accept every single one of the new e-Comms channels, which are multiplying like rabbits. But it does require that they formally approve at least one such channel and enable all the back-end infrastructure needed for compliant operations.

Keeping records for all of it sounds simple, but you could pay up to $200 million for not doing so. And look at the fallout from the Gamestop buying frenzy instigated on Reddit. Monitoring for recommendations made on social media sites is challenging but essential. Advertising to the public is in the same bucket and needs to be monitored carefully, too.

At the end of the day, record-keeping is at the foundation of RegTech; essentially to keep brokers, financial firms, and the clients they serve – honest. Everyone aims for a standard of integrity with zero tolerance for market abuse and inappropriate conduct, but few achieve it. Hence, good ol’ RegTech is as essential as it is “boring.”

Check out a recent webinar I took part in, discussing those points and more 


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