Call recording will be a legal requirement for some financial service firms
Some firms who provide financial services to clients will now be legally required to record all telephone conversations, according to the Financial Conduct Authority (FCA) under MiFID II requirements. Whilst it is imperative to stress this only affects a small proportion of financial services firms, it is nonetheless important to understand how the change may affect your business.
The Markets in Financial Instruments Directive II (MiFID II) is an EU regulation that is due to take effect from 3 January 2018. Despite Brexit, the FCA is still pushing ahead with this new legislation.
In a proposal published last year, the FCA stated “Following the result of the United Kingdom’s (UK) referendum on it’s membership of the European Union (EU), we published a statement on 24 June in which we said ‘Firms must continue to abide by their obligations under UK law, including those derived from EU Law and continue with plans for implementation that still have to come into effect’.”
This change will affect firms including investment managers, stock brokers, corporate finance firms and independent financial advisors.
Currently only 10% of advisers record their telephone conversations, according to a recent FCA survey.
A consultation paper released by the FCA in September 2016 said, “Based on information from the Financial Ombudsman Service, the majority of complaints about investments centres are on the conversations that happened when they are sold. We think taping conversations between firms and their clients is likely to be an effective way of advancing our consumer protection objective”.
The recordings must be held for at least 5 years.
Hosted telephony (or VoIP) is an ideal way to record conversations. Delivered over the internet and stored in the cloud, the technology enables you to record telephone and mobile calls securely, even when mid way through a conversation.
Calls can be recorded on any device or network and are stored securely whilst complying with data protection and privacy laws.
As well as being a necessity for compliance for a small proportion of financial organisations, call recording is valuable for identifying issues for training, dispute resolution, note taking, shaping employee incentive schemes, all resulting in improved productivity, efficiency and customer satisfaction across the business.
Call recording is just one benefit of hosted telephony which brings a wealth of features to any business. One of the most important is cost, where businesses typically see bills drop by at least 30%, due to no ongoing maintenance charges, installation costs or the need for multiple lines.
To talk to us about hosted telephony, please call one of our specialists today on 0333 200 1528.