Texting Is Top Threat for Compliance Teams 

Texting remains the top source of risk for compliance teams, according to a report based on a survey from archiving and compliance firm Smarsh. 

The report, “An Unprecedented Era of Enforcement,” focuses on how financial services organizations are responding to challenges and regulatory scrutiny related to digital communications compliance, particularly given the SEC’s recent crackdown on off-channel communication. 

While 65% of respondents identified texting as a top threat, nearly half mentioned that their organization permits texting, indicating a discrepancy between the perceived risk and the actual practices within organizations. The survey also discovered that 17% of businesses allow the use of encrypted apps like WhatsApp and WeChat.  

“If you look at the data we saw in the survey, a little bit less than half of the respondents said that they permit text messaging for business use. And that almost seems a little bit out of touch with reality when you think about just the fact that almost everyone is using text messaging for everything in their lives,” said Steve Marsh, Smarsh founder and chairman. 

Furthermore, 90% of respondents spend less than 25% of their effort developing or modifying policies and systems to ensure compliance with new and changing communications requirements. 

Smarsh surveyed 229 respondents with communication compliance responsibilities. The respondents came from broker-dealers, RIAs and private equity firms.