The UK’s Financial Conduct Authority (FCA) recently released a ten-point checklist for companies in anticipation of the new Consumer Duty regulation set to be enforced on July 31, 2023. This regulation marks a pivotal shift in the regulatory landscape, impacting both new and existing services and products available for sale or renewal.
Susannah Hammond, senior regulatory intelligence expert at Theta Lake, recently outlined the challenges firms are facing with compliance and how AI can help.
The FCA’s checklist features two points specifically focusing on communication, posing questions such as how companies are testing the effectiveness of their communication strategies and adjusting them to cater to vulnerable customers. Additional points delve into ongoing monitoring of product and service value, the quality of customer support, and post-sale assistance.
Hammond said it’s evident that communication compliance lies at the core of the FCA’s expectations for firms in alignment with the Consumer Duty. The FCA strongly advises companies to bolster their attention on every aspect of communication compliance, vowing to prioritise severe breaches once the Duty comes into enforcement.
Nevertheless, the obstacles ahead are formidable. The modern business world heavily relies on dynamic unified communication (UC) tools such as RingCentral, Zoom, Cisco Webex, Slack, and Microsoft Teams. The hybrid working environment these tools facilitate generate a mammoth amount of data, surpassing the capabilities of human review.
Consequently, firms are faced with the necessity to preserve an ever-expanding array of content, including emojis, GIFs, and edited or deleted messages, to ensure efficient data retrieval and surveillance. This necessitates preserving the native context of content, which is fundamental for proper surveillance and evidence gathering on communication efficacy.
Artificial intelligence (AI) proves a potent ally in dealing with these challenges. AI requires comprehensive recordkeeping and allows massive volumes of communications to be analysed. It enables organisations to detect risks and breaches on a grand scale, alerting them in real time and helping them prioritise review areas. This potential has intrigued risk and compliance departments, prompting them to explore the benefits of AI, machine learning (ML), and natural language processing (NLP).
The journey towards adopting AI-based risk detections, designed to focus on specific compliance, conduct, or security risks, can offer numerous benefits. The technology can detect confidential or personal information, including account numbers, email addresses, and birthdates, as well as sensitive documents. This means individual organisations don’t need to train AI models or verify results.
Specifically, AI’s capacity to understand specific risks in context reduces false alerts and catches risks that may be overlooked due to unclear audio or transcript. With a well-trained AI, organisations can view all elements of communication with respect to the Consumer Duty.
Theta Lake, a renowned technology firm, offers patented compliance and security for modern communications with over 100 frictionless partner integrations. Its multi-award winning product suite aids organisations in capturing and archiving communications compliantly, enabling them to adhere to relevant recordkeeping requirements. With more than 85 pre-trained risk detections, Theta Lake offers an efficient review process for compliance teams and provides an exhaustive audit trail for supervisors, regulators, or prosecutors.
Theta Lake’s compliance suite meets the requirements of SOC2, Type II audits, and aligns with ISO 27001 standards. As such, it can automatically redact confidential, privileged, or sensitive data to meet data privacy and other legal obligations.
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