Financial firms brace for enhanced video call regulation to protect retail investors

To comply with upcoming regulations, financial firms may have to monitor employee video calls, just as they do with text messages. Regulators in the U.S. and UK are extending their focus to boost protections for retail investors.

Regulators are preparing to cast a wider net when it comes to financial industry oversight. Video calls are now on their radar, with a focus on ensuring compliance and protection for retail investors.

The US Securities and Exchange Commission's (SEC) has issued hefty fines for communication violations and is nearing a resolution on an extensive investigation into investment advisors' breaches.

In anticipation of these changes, financial firms are proactively engaging technology specialists, law firms, and risk consultants to monitor and store video call records. Some major banks have already begun recording Zoom calls, signaling a shift toward more robust record-keeping practices.

Navigating the video call landscape

With the increased use of video calls in the finance sector, regulatory frameworks are not yet fully developed or adapted. However, the unique risks associated with visual exchanges and the limited use of technology for monitoring have prompted a call for expanded regulatory reach.

HSBC's video call recording

Reports suggest Hong Kong and Shanghai Banking Corporation Limited (HSBC) record client video calls, yet Reuters couldn't verify.

In the U.S., Financial Industry Regulatory Authority (FINRA) mandates tapping phone conversations, but it's unclear if this extends to video calls.

Evolving regulations in a digital world

As technology continues to advance, the regulatory landscape will likely follow suit, striving to ensure that video calls meet the same compliance standards as traditional forms of communication. Financial firms are gearing up for a new era of oversight and accountability.