This is a guest post from Darren Chun, Director of Content Strategy & Acquisitions at Smarsh, originally seen on the Smarsh blog on July 28, 2014.
According to the Pew Research Center, a whopping 81% of Americans use their mobile phones to send or receive text messages*, showing that mobile messaging is one of the main ways families, friends, and businesses use electronic communication to connect.
Texting is a casual way to keep in touch that’s easy, reliable, and intuitive. However, for registered financial firms, the Securities and Exchange Commission (“SEC”) and Financial Industry Regulatory Authority (“FINRA”) require that electronic communications used for business purposes (including text messages) must be archived and supervised for compliance reasons.
Even if your firm is not under a regulatory obligation to supervise communications, text messages can also be requested as part of an e-discovery event or HR investigation.
There’s a Big Elephant in the Room
An alarming trend revealed in the Smarsh 2014 Electronic Communications Compliance Survey Report shows that despite the widespread availability and use of mobile messaging, texting isn’t receiving the same level of supervision attention as other forms of electronic communications, like email or social media.
More than one-quarter of survey respondents said they don’t have a policy in place governing the use or prohibition of text messages. Even more concerning, more than two-thirds of firms that allow text messaging don’t have an archiving solution in place for retention and oversight of those messages.
Because of this, confidence about meeting industry retention, supervision and production requirements for text messaging is very low.
Even among firms that allow text messaging, more than half of the respondents have no or minimal confidence they could provide regulators with requested messages, within a reasonable timeframe.
Compliance professionals whose firms prohibit texting also have low confidence about meeting retention, supervision and production obligations. Almost half of these respondents said they have minimal or no confidence they could prove their firm’s policy of prohibition is followed.
Text message archiving and supervision ‘neglect’ exposes firms to significant risk, considering how widespread mobile devices are today. Eighty-eight percent of survey respondents said they are issuing at least one type of smartphone or tablet to employees.
There is a Solution
Archiving, monitoring and producing mobile message data needs to become a core part of risk-based surveillance and litigation preparedness. Firms need to put policies in place, and implement an archiving and supervision solution as soon as possible—before it’s too late.
Address that elephant in the room. Check out the mobile archiving solutions from Smarsh.
*When referring to text messages we mean communications sent/received via a phone’s built-in messaging system including SMS, iMessage, PIN & BBM.
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