FCA Compliance

The Financial Conduct Authority (formerly FSA) regulates most UK financial services markets, exchanges and firms. It sets the standards that they must meet and can take action against firms if they fail to meet the required standards. The FCA regulations are complex and this summary is our interpretation of the elements of the regulations where the use of call recording and allied agent training, evaluation and monitoring solutions are either becoming mandatory or their implementation is beneficial in helping organisation to comply with FCA regulation.

Whilst it has always been an FCA requirement to have full and accurate records of all transactions and trades including a full audit trail to show that the best interests of clients are maintained at all times, it not mandatory to record calls in every instance, however this is changing for some financial activities and in reality the only way to accurately and efficiently document telephone based transactions is to deploy voice recording technology. This gives instant access to recordings relating to particular clients, traders, times, dates, etc. and the use of allied agent evaluation and monitoring software assists companies to train and monitor staff to ensure that compliance is being achieved and evidence can be produced.

Further information on how FCA regulations may affect different industry sectors:

UK financial institutions are required to be registered with the Financial Services Authority. In the recent past the recording of calls has been optional, although widely used in the industry as an effective way of documenting telephone based transactions. However under new regulations introduced by the FCA from March 2009 firms are now required to record all telephone conversations and electronic communications involving client orders for the equity, bond and derivatives markets and retain the files for six months.

The FCA initially applied an exemption to recording voice conversations on mobile phones and other handheld devices but as from November 2011 these call are required to be recorded as well. The FCA regulations were introduced in line with an EU review, including the addition of a recording requirement, under the Markets in Financial Instruments Directive (MiFID). The introduction of the call recording programme is part of the FCA ‘s efforts to combat market abuse, particularly insider dealing and market manipulation. As from 3rd January 2018 new far-reaching regulations known as MiFID II come into force which includes increased requirements to record communications in the financial sector.

Most insurance businesses are required to be FCA registered and many of the biggest FCA fines to-date have related to the selling of insurance particularly PPI and CTI policies. Although not mandatory in the General Insurance sector, the use call recording equipment and allied agent training, evaluation and monitoring solutions is one of the best ways to accurately and efficiently document telephone based insurance transactions as well as making sure there is adequate training and monitoring. This makes it easier for regulated Insurance intermediaries to satisfy the FCA that adequate records are kept and demonstrate that customers are being treated fairly. For those insurance businesses that sell financial products such as some mortgage and pension products it may be mandatory to record calls from as per the Financial sector.

The new FCA scheme for regulating travel means that all travel companies or agencies who sell Connected Travel Insurance – policies bought with a holiday, travel tickets, accommodation or tours – will have to become regulated by the FCA . Companies could apply for FCA authorisation to sell CTI from June 2008 and the scheme came into force in January 2009. If travel firms choose not to seek authorisation, they can become an “appointed representative” of an authorised firm or an “introducer”, but even those who take this route will have to be very careful just to recommend insurance and not to give advice. Travel companies will in every event have to make sure staff are well trained and appropriate records of transactions are kept. It is not mandatory to record calls, however, the only easy way to prove that customers are being given the right information and being treated fairly is to deploy voice recording technology.

Although financial services is not a prime activity for most retailers, many such as motor or furniture retailers offer installment credit finance as well as selling Payment Protection insurance and as such many are required to be FCA regulated. Again because the transaction or part of the selling process may take place on the telephone retailers need to show that there are adequate records of the telephone conversations and that staff are fully trained and monitored so that it can be shown that customer interests have been protected. Large FCA fines have been incurred by retailers for ineffective monitoring and training of staff in selling PPI. Accordingly the use of voice recording technology can provide protection.

Storacall have considerable experience in helping companies to meet FCA requirements by providing cost effective call recording together with agent evaluation and training solutions that ensure that suitable records are kept, agents are regularly monitored, consistently trained and an audit trail is maintained. The solutions introduced to meet these requirements also have the added benefit of assisting dispute resolution and significantly improving agent efficiency and performance, whilst reducing call handling times and cost.

Want to discuss your FCA requirements?

Contact one of our product specialists to see how we can help you.