Prohibiting Tech Makes Life Harder for Compliance Officers

Kachina Shaw

Prohibition didn’t work for the feds, and it doesn’t appear to work all that well for the enterprise, either. A newly released set of survey results from Smarsh indicates that approaching regulatory requirements by prohibiting technologies and communication channels produces less satisfactory outcomes than allowing and governing them.

Among compliance officers, staff and C-level executives in financial services firms surveyed by Smarsh, “respondents who allow and govern employee use of social media and other emerging forms of communication were far more confident in their ability to provide specifically requested messages within a reasonable time frame than those who ban its use were in their ability to prove prohibition is working.”

The difference in confidence levels persisted across all types of communication, not just social media, and including both public and enterprise systems. Interestingly, prohibiting organizations face not only the burden of proof for data requests from the SEC, FINRA and other regulatory bodies, but also pressure from end users and even customers who use the tools.

The company’s third annual Electronic Communications Compliance Survey Report found similar confidence levels among respondents regarding their BYOD policies. Firms are allowing their users more choices among mobile devices, and 14 percent fewer respondents said “new communications devices” were a compliance concern this year over last year. A notable gap remains, however, between the percentage of organizations with a policy in place allowing device usage and the percentage with a supervision and archiving program in place to support that policy.


The survey report includes details on document requests in regulatory examinations for these organizations; in short, the requests for all types of communications have increased in 2013 so far over 2012, with email the most-often requested. Instant messages came in at number three, and social media at number five. Seeing as these requests will likely continue to increase, right alongside the number of communication channels available, coming down on the side of allowing use with proper policies and supervision in place, rather than a total ban, may soon become the only choice.



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