ASIC falls in line with global regulators, tougher actions expected to follow

Australian regulator, ASIC, is calling on financial institutions to strengthen their supervisory arrangements for recording and monitoring business communications to prevent, detect and address misconduct. 

The risks are real 

Rapidly evolving technologies and use of personal devices present significant challenges for financial institutions when it comes to monitoring and record keeping.  

ASIC recently released  Information Sheet 283 which directly responds to concerns that the use of unmonitored communication channels and encrypted communication applications in business communications can significantly increase the risk of misconduct going undetected.  

Risks arising from the use of unapproved communication channels were recently highlighted by actions taken by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. These regulators reached record-breaking settlements with dozens of financial institutions for failures to maintain and preserve electronic communications. 

Guidance and expectations 

ASIC’s Info 283 provides guidance on how to manage the risk around eComms surveillance, and lays out expectations with regards to capture, monitoring and consequence for messaging apps and unapproved channels.  

Highlighting the common challenges and pitfalls, ASIC calls out: 

• the emergence of new and popular communication channels that are outside the scope of current surveillance systems; 
• weak or no controls to identify where data used in surveillance systems is incomplete or erroneous; and 
• reliance on ‘out of the box’ settings of vendor-provided communication surveillance systems and a failure to routinely calibrate alert parameters.

Managing those expectations  

ASIC expects Australian financial institutions to take reasonable steps to actively monitor and store business communications, and considers business communications to include any written, voice or electronic communications used to carry on their financial services business.  

Now that ASIC is taking more of a global stance these institutions will need and want to be protected.

If you’d like to know how Shield helps financial institutions streamline surveillance, uncover behavioural insights and empower compliance eDiscovery, get in touch.