HomeBusinessJPMorgan’s High Fines Were Shocking; the Compliance Failure Was Not

JPMorgan’s High Fines Were Shocking; the Compliance Failure Was Not



Last month’s $125 million SEC fine combined with the $75 million CFTC fine against JPMorgan sent shockwaves through financial and other regulated customer-facing industries. 

According to a Security and Exchange Commission (SEC) release, hefty fines brought against JPMorgan, and its subsidiaries were based on “widespread and longstanding failures by the firm and its employees to maintain and preserve written communications”. These views were echoed in a CFTC release as well.

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While the price tag of these violations was shocking, the compliance failure was not. The ever-changing landscape of rapid communication via instant messaging apps, such as WhatsApp, Signal, WeChat, Telegram, and others, has left regulated industries to find a balance between compliance and efficient client communication. Approved forms of communication such as phone calls, emails, and fax are viewed by some consumers as obsolete. So, as teams work to remain relevant, team leaders and employees carry the burden of ensuring a better and more intuitive customer experience.

Many of these instant messaging platforms are secure, even offering end-to-end encryption, so the lack of security is not necessarily in the apps themselves. Without a responsible business communication platform for these conversations to flow through, customer requests and discussions live only on employees’ devices. Besides going against regulatory requirements, it also means that if an employee leaves the company, customer data goes with them.

With over 5 billion monthly users on these chat platforms, allowing employees to use these streamlined communication channels with no oversight poses a double-pronged challenge for companies. The first is, how do they monitor these conversations to ensure optimal customer experience? Second, how can they promote efficient communication using the customer’s preferred channel while remaining compliant with local regulations?

It’s no secret that companies are aware of what they are missing. By not being allowed to use common chat platforms, which enhance the customer experience, organizations have a hard time appearing relevant to their clientele. 

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The current status is to force clients to use traditional communication methods while banning instant messaging apps.  A more practical solution would be to use an enterprise-approved chat application that allows employees of regulated industries to chat via customer-preferred apps while archiving all chat data on company servers. 

The latter comply with record-keeping regulations since the chat is occurring through a mobile application or desktop that requires all data to flow through a company cloud or on-premise server.

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Dima Gutzeit
Dima Gutzeithttps://www.leap.expert/?hsLang=en
Dima Gutzeit is the Founder and CEO of LeapXpert.

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