It's now over a year since the legal requirement to record mobile communications to and from trading floors was introduced in the UK, and yet take-up has been sluggish. Between a third and two thirds of financial services institutions have failed to implement a working solution for compliance.

That’s according to a new report from Ovum. The analysts do, however, expect this situation to improve over the next couple of years, driven by the spread of such regulation to other geographies, most notably the US and EU. The industry regulator formerly known as the Financial Services Authority (FSA) delayed the introduction of the requirement for two years in 2009, specifically because the technology to carry out recording of mobile phone calls on an automatic and tamper-proof basis did not yet exist. However, it appears that some development remains to be done in order to achieve this goal.

Mobile network operators are only now starting to launch SIM-based services of their own as similar regulation spreads to the EU and North America. This is instead of partnering with small vendors to offer a stopgap based on a software client loaded onto the mobile device, as many have been doing over the past year. These SIM-based offerings will of course have to be accompanied by all the necessary compliant behavior, such as tight service-level agreements with financial markets customers and secure, audited data centers to hold the recordings.

Beyond regulatory compliance, more institutions, particularly at the higher end of the market, will begin to subject their recording data to analytics with a view toward deriving insights into how their trading floors are performing and improving productivity. Such a trend will no doubt require a culture change on trading floors, which have not traditionally been subject to high levels of scrutiny and analysis.

Rik Turner, senior analyst within Ovum’s Financial Services Technology practice, comments: “Large movements in the space are imminent as the market for mobile call recording becomes more international, and so the regulation’s true impact is yet to be felt. However, don’t expect the market to go 100 per cent to carrier-delivered mobile comms recording services, with recordings held in the cloud, overnight. High-end investment banks are likely to hold all their recordings on-premise, just as they have been doing with their fixed-line recordings, although this in-house attitude is going to be tempered by the more complex realities of the BYOD trend.”

Share Story: