WhatsApp is emerging as a powerful communication channel for business, especially for global trading and other time-sensitive correspondence, but before a positive impact is recognised there are key compliance challenges a firm must address.  

Wall Street came under scrutiny recently for the failure to preserve client conversations over WhatsApp. However, when adopted compliantly, the messaging app will help firms address pressing digitalisation challenges alongside evolving customer needs. In doing so, this will help form a stronger global communications strategy for the business that will remain strong under a regulatory spotlight.  

Three aspects where WhatsApp use aligns to regulatory guidance are around digital transformation, fair treatment of vulnerable customers and addressing increased visibility. Each demonstrate the positive impact adopting WhatsApp could have on businesses.  

Digital transformation 

In 2019, BaFin published the position of the Savings Bank Finance Group on key aspects of digital transformation, which highlighted a behavioural shift among the consumer base towards new channels of communication. This marked a catalyst for new technological opportunities. During the recent global pandemic, the financial sector has seen further behavioural shifts towards clients wanting to communicate over multiple communication platforms to conduct business on the move or remotely. 

Channels like WhatsApp or Telegram are fast becoming a channel of choice for client communication within investment banking and other regulated sectors due the app’s speed and convenience and adoption of a muti-channel communication strategy has the potential to bring significant reward for firms.  

Fair treatment 

Reacting to the impact felt by the Covid-19 pandemic, the FCA updated their guidance on the fair treatment of vulnerable customers, citing the use of different communications channels as a consideration for firms to help provide the appropriate levels of care for customers at risk.  

An interesting viewpoint taken by the FCA to encourage firms to ensure they understand the needs of their customer base and are responding to them. This can be taken as best practice across all customer facing roles, in turn enhancing the quality of customer service seen globally.  

Increased visibility 

 The effective monitoring of multiple client communication tools is a key challenge to meet compliance and Best Practice, pursuant to the Markets in Financial Instruments Directive II on a firms’ recording requirement for securities transactions. 

Regulatory technology such as compliant capture solutions are low-cost, tamperproof, and easy to implement, which ensure record-keeping obligations are consistently maintained while adopting a multi-channel communication strategy. Furthermore, recording electronic channels of communication offer additional security and visibility for both the bank and the client. In case of a dispute, a clear audit trail of the evidence will ensure that lengthy disputes are less likely in future. 

There is no question that WhatApp as a means of communication is here to stay. It is a channel increasingly chosen by the client as their preferred way of communicating. Ensuring compliance on this channel, and others which will no doubt follow in its footsteps, will be critical to the agility and competitiveness of regulated companies who aim to put their customers first. 


To learn more about how VoxSmart are equipping firms with technological solutions to ensure compliance across a range of communication channels get in contact with us today here!

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