The Next Big Step in Financial Compliance: A Compliant Messaging Solution

By Guy Trotter on October 3, 2016
Guy Trotter

Product Manager

Guy has over 20 years experience in software, product management and business development in the telecommunications networking industry.


The shift to electronic messaging as a preferred form of business communication is not limited to email. Text messaging, social media, and instant messaging have become increasingly prevalent in business, just as they have in personal communication.

While we may think of instant messaging as a casual medium, not all instant messages are innocent and harmless.

The public instant messaging medium is especially vulnerable to facilitating illegal collaboration and manipulation for the following reasons:

  • They are generally outside of control by their respective corporations.
  • They enable users to cloak their identities.
  • They enable users to exchange messages outside of any formal record keeping pertained by financial regulatory requirements for archival and review.

This highlights the necessity of a compliant messaging solution for financial corporations. Had the Libor or Forex traders been using a compliant messaging solution, compliance officers and regulators would have been able to spot egregious behavior as it happened. There would have been a complete record of such communication, to the level of determining exactly who composed a message, when it was composed, who viewed the message, and when it was read.


What Should A Compliant System Have?

A compliant messaging solution integrates a number of capabilities, including:

  • Sent, delivery and read receipts for tracking purposes
  • Ethical walls to ensure that participants are authorized to communicate
  • Message retention to ensure that messages are securely retained in accordance with regulatory requirements
  • Message audit and review through sampling and keyword matching
  • Case management, legal hold and export for legal review or to serve regulatory agency requests

A compliant messaging solution also needs to be secure and encrypt data at all points - both in motion as well as at rest - in any and all intermediate and final data stores. There also needs to be controls to ensure that message data is available only to authorized parties.

Finally, a messaging solution must build trust amongst participants. The financial world relies upon the trust between counterparties to ensure that they know who the counterparty is, who they work for, and their role in their corporation. Counterparties need to find one another and have complete confidence that the person they are or will communicate with is who they say they are, is able to undertake the transaction required, and is a bona fide representative of their corporation. This drives the requirement for a financial services directory, wherein the identity of each user's entry in the directory is directly coupled to the data published by the user's employer.

The Next Big Step In Financial Compliance

Even though a small number of compliant messaging solutions are currently available, the trend is that they do not satisfy the needs of financial institutions at the appropriate price point. Feature-rich enterprise messaging and unified communication solutions entail the installation of hardware and ongoing management by IT staff, while the reach of these solutions outside of the company is limited to federation with systems from the same vendor. Messaging solutions available through financial data or trading terminals restrict the user to their own systems while the costs of using such systems exceed corporate expectations.

Despite this barrier of adoption, all signs point towards a leap in technology in the near future to catch up with the growing need for a compliant messaging solution at the right price. If you're in need of a cloud messaging platform, take a look at Global Relay Message. It is designed to meet the messaging, federation, compliance, privacy, and security needs of the financial sector and other highly regulated industries.

Global Relay Message

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