the evolution of mobile recording in the UK
On November 14, 2011, the UK Financial Services Regulatory body (the FSA) removed an exception for mobile devices within the requirement to record trading activities over the phone. At the time there was an element of firms leaving the implementation of mobile phone recording until the last minute, as well as, or maybe because of, some uncertainties of the first generation of mobile phone recording technologies (see “Tide turns for no man”).
Immediately post-November 14 there was a mixed feeling amongst the affected firms, with some being compliant and others finding that their chosen solutions were unworkable. So given the state of play at that time, I thought it was interesting to revisit the situation 4 months on from the live date.
This has certainly been a lively period of discussion within the market, with a selection of firms working with the FSA and even obtaining a grace period in some cases whilst they attempted to get their solutions more up to full compliance.
The biggest challenge of the first generation handset based solutions has been that the design relies on setting up a second (conference) call to facilitate recording. Clearly this creates a potential overhead and a delay in setting up the call in the first place, with varying results from different mobile network carriers and software used on the handsets. The net result being that although working fine for some, the slow connection times encountered for others has proved to be unworkable.
So what next? As these are first generation solutions, there is probably scope to review, revise and improve the software and design used, but will this be enough?
Perhaps an obvious alternative would be to move to a carrier based solution, basically recording the communication traffic (voice and SMS) as it passes through the carrier’s network. Maybe this was not considered so seriously at the time, because mobile recording for traders was seen as a relatively low volume specialist requirement for a subset of the firm’s mobile phone community. Additionally, initial trails and proof of concept were more focused on the handset route, which was felt to be sufficient at the time.
For those firms still struggling to make their current solutions workable and compliant, it looks like there is a growing interest in carrier based mobile recording. This approach also has other benefits, such as:
- it is handset agnostic (even allowing ‘mix and match’ of handsets to meet individual’s preferences),
- is more secure, as it is impossible to bypass,
- could be seen as easier to administer financially, as mobile recording is provided as a service option to the selected users mobile phone contract
So more of an evolutionary path to mobile recording in the UK in the end, however, what is certain is that the world’s regulatory bodies are going to persist with their drive for greater visibility and surveillance of market activities. Subsequently, technologists will need to heed lessons learnt; as such requirements become more widespread.
photo © Suprijono Suharjoto - Fotolia.com
March 14, 2012byIn our view, there are still too many unknowns surrounding SIM replacement technologies for them to be readily accepted in a compliance context at this time. However, just as the banks opened up from only buying basic telecoms from Tier 1 fixed line carriers to eventually also sourcing call minutes etc from Tier 2 carriers, we can expect the same diversity in the procurement of mobile services in mobile over time. However, regardless of recording, the fact remains that today, the companies selling SIM replacement for recording are not yet sufficiently proven and trusted on the basics of their MVNO mobile services for them to be the City's preferred choice for those basic mobile voice/data services that form the foundation of their service proposition. Most of the banks still want to buy their mobile services directly from their mobile carrier. So these new entrants are unlikely to be adopted en mass, until they can establish first that they have the service wrap and reliability in place that would make them a viable alternative to a mobile carrier for basic mobile voice/data services... and then they will also need to prove that they have the deep understanding of call recording and compliance which would make their off-site recordings acceptable to a compliance officer. Over time, this may change, but right now, the SIM replacement option is still very much a first generation technology, that aims to hub calls via a non-carrier PBX with a recorder of some type attached. Being new to a market does not necessarily make an approach sufficiently new to be accurately sold as a next generation technology.
Voxsmart fielded a compliant mobile recording solution for the 14th November deadline. It has been successfully deployed and signed off as "compliant"
and "fit for purpose" by enough large firms following initial deployment for it to be reasonably judged a success, so that our customers can complete the FSA's FSA's ARROW II risk reports and properly indicate that mobile recording is in place.
There will be next generation solutions and I expect that all of the original vendors of mobile recording (Voxsmart, Obsidian, Compliant
Phones...) have on-going R&D. Since these companies have been in the market longer than any new comers and have learned from experience and feedback, good and bad on large scale deployments, they are much more likely to field a viable next generation solution than a completely new set of entrants to the market, who are essentially using recording as a value add to win mobile contracts from mobile carriers by leveraging their unified comms platform.
We all agree that the network is the best place from which to join calls to a recording system, but the complexities of doing this in a compliance context needs a very thoroughly thought out technology approach, preferably in conjunction with the carriers themselves.