Financial services companies are finally waking up to the compliance risks lurking on their websites and discovering that exposing the unknowns also presents great opportunities
The coronavirus pandemic has seen financial services companies consolidate digitalisation into a shorter window to improve online communication channels and stay connected to customers. This has accelerated digital transformation strategies by six years, according to research by Twilio. Yet while adoption of newer digital tools has propelled forwards, the website, which remains the face of a business, is sometimes forgotten.
It’s crucial, for compliance, that firms can evidence digital communications across their web estates with accuracy and confidence. Due to the ongoing pandemic, firms are also publishing more information that has to be captured and archived. This has made archiving modern websites an even more difficult task.
Modern websites are more experience led, with dynamic or personalised modules, videos, dropdowns, rich media and vast datasets. Web archiving captures online records in a format that’s time-stamped, legally admissible and available for replay.
“One of the biggest concerns for financial services firms is whether they meet the requirements set forth by regulators,” says David Clee, chief executive of website archiving and monitoring firm MirrorWeb. “From the Financial Conduct Authority (FCA) to the US Securities and Exchange Commission and Financial Industry Regulatory Authority, regulators often view inaccurate or incomplete records as non-compliance.
“Due to legacy compliance platforms and redundant in-house processes, many financial services firms are unable to produce quality records that call into question their ability to evidence compliance.”
The rapid adoption of new technologies, even before this year’s pandemic struck, has meant the way firms communicate and engage with customers, from internal communication tools to social and web platforms, is under unprecedented scrutiny.
The FCA issued a record £392 million in fines in 2019 compared with £229 million in 2017, representing a significant increase. Further to this, a study from Teleware identified that two in five firms are risking non-compliance with article 16 of the European Union’s Markets in Financial Instruments Directive II, or MiFID II, over record-keeping, facing fines of €5 million or 10 per cent of their annual turnover.
Transactions made online between July 2019 and July 2020 were 19 per cent higher than the year before, according to analysis by ACI Worldwide. This trend is set to continue, led by the ecommerce shift the pandemic has enforced, which means understanding what was said on a website, and when, has become even more critical.
In this landscape, it’s no surprise that both digital transformation and compliance budgets have increased this year. Recent research by SteelEye found 40 per cent of firms have been given a higher compliance budget to manage problem areas since the pandemic began. Financial services firms must take immediate action to minimise risk as they advance their digital efforts at greater speed, ensuring their internal controls and processes can capture, monitor and evidence digital channels.
“Sadly, there is no ‘half compliance’,” says MirrorWeb’s Clee. “In the eyes of regulators, you’re either capturing complete records of your online communications or you’re not. It’s not just about regulation. By not having website records, companies also risk trademark infringement, legal disputes and brand assets being compromised or lost. Web archiving solves all these issues, while also presenting opportunities in other business areas.”
Indeed, the savviest companies are realising that website archiving, and understanding exactly what is communicated across their websites, is not just a tool for risk management and meeting their compliance obligations. It also presents unique opportunities throughout the organisation, most notably improving transparency and brand value at a time when customers increasingly care about who they interact with.
“The sentiment around compliance is often negative, but we feel there are also very positive opportunities here for companies,” says Clee. “Those who provide transparency while protecting customers’ interests are more likely to fare better in the current climate and beyond. Knowing what they communicated and when allows organisations to be more transparent and accountable, and better able to protect both their own interests and those of their customers.
“To put it simply, firms that provide excellent digital experiences, as well as improved online compliance, will enhance their reputation and perception in the eyes of customers.”
MirrorWeb captures, archives and preserves web-based content. Born out of a large-scale web preservation project on behalf of the UK government, its archiving platform is now widely adopted by financial services firms around the world, giving them complete control and confidence in what they capture.
From small locally-based websites to vast global web estates, MirrorWeb’s technology was built to capture dynamic content and complete digital experiences. The company drives innovation to firms, supporting their digital transformation while helping them to improve digital compliance and oversight.
Next year will be an exciting time for MirrorWeb, with plans for expansion into the United States and a move to a pure SaaS (software-as-a-service) model to support small and medium-sized enterprises that require something with a very light touch.
Automation is a particularly important element when it comes to recording, monitoring and supervising digital content. Historically, some financial services firms have employed teams solely tasked with this responsibility. But with the rapid increase of digital channels and constant updates to web estates, it’s no longer feasible without automated support.
MirrorWeb’s automation significantly drives down compliance costs and improves operational efficiency by removing the need for any manual effort and allowing teams to improve their internal controls and processes.
MirrorWeb’s web archiving and monitoring technology is highly configurable, enabling financial services organisations to define the frequency of capture along with what they capture. The company’s innovation makes it possible to include or exclude specific areas across a web estate. It can conduct crawls by geolocation or device and even archive gated-website content such as intranets. This is a huge step away from legacy offerings and gives businesses in the financial sector full confidence in the records they capture.
“Our vision is to give financial services companies ownership of their digital truth,” Clee concludes. “At the close of 2020, we’re proud to say we’ve helped a number of global firms achieve this during such challenging times. We know the web will continue to be a primary communication channel for businesses all over the world, meaning web archiving has a huge role to play in keeping regulated firms compliant and preserving information for the future. We look forward to continuing to deliver innovation to our customers and supporting their digital compliance and transformation initiatives.”
To learn more about MirrorWeb, please visit www.mirrorweb.com