Social Networks and the Regulators

Actiance's Sarah Carter gave a fascinating presentation at the Finextra Social Media Day, which clearly resonated with the audience, when she got into the very thorny topic of regulatory compliance.

So much of compliance today is about client protection and of course there have been far too many regulatory breaks from a host of different financial services firms. MiFID two is going to put further steps in place for client protection processes and systems, across all asset classes and not a minute too soon. However, the Social Networking world we now live in puts many of the client protection rules into areas of extreme threat. It is for this reason that I was taken by Sarah's presentation of actiance.

The system which allows monitoring and control of connections to social networking both internal and external, has the laudable virtues of flexibility making it especially valuable for use in Financial Services Organisations beyond it's extensive capabilities for use in Social Networking. For example when Financial Services firms are working on an IPO, information concerning the IPO, is only released on a ‘need to know' basis, for fear that any leak will ruin the deal or may allow insider dealing.

Firms normally deal with this by putting a lockdown process in operation where access to the information is only available by approved personnel physically entering into a secure area. Quite frankly this only works if the people involved are honest but as we know not everyone is.

To enhance this security, actiance is able to electronically put security wraps around individuals and groups, communication capabilities, within a price sensitive transaction or timeframe.

Actiance has already mapped its products capability in proving compliance to regulatory requirements in the USA, Canada, UK and into mainland Europe.

The problem of security will never go away completely and Social Networks are here to stay and will continue threaten the largest deals and primary transactions. Realistically, we can't restrict access to social networks, only monitor. Although I have many reservations concerning consumer control I have none when it comes to controlling internal banking staff. Actiance looks like a very good solution for implementing a market abuse protection capability whilst proving compliance.