Do the benefits of ‘work from home’ (WFH) really outweigh the compliance risks, and can remote data really be captured to the Financial Conduct Authority‘s (FCA) standard?
This is the central focus of the Alternative Investment Management Association’s (AIMA) most recent survey, which accumulated data from its cybertech virtual forum held in April.
The study provides an insight into the impact WFH is having on workers’ mental health and analyses the growing reliance on regtech that enables compliant communications.
According to the study, 72 per cent of forum attendees said flexible working has had a positive impact on the mental health of their teams.
Seventeen per cent believe it has had a negative impact while 11 per cent are unsure of any impact.
The UK is among the top nations embracing hybrid working for the long term, with desk-based workers expressing the desire to retain these freedoms.
The company’s similar study of the alternative investment sector, conducted in 2021, revealed how fund managers are taking this trend seriously.
When asked how they are seeking to retain talent, 69 per cent of fund managers surveyed said they are focused on improving the work/life balance of their employees.
Just under half said they are actively offering mental health guidance and support to achieve this.
The findings of AIMA’s most recent survey are backed by many similar studies, which together point to the link between flexible working and improved mental health.
A 2018 FlexJobs study of 3,000 professionals found that more than 97 per cent of people believe that having a more flexible job has a positive impact on their quality of life.
The AIMA report goes on to point out that facilitating flexible working in the financial services sector requires a greater reliance on technology
The sector continues to seek and leverage regtech that enables compliant communications and data sharing in a virtual world, creating a surge in demand for digital compliance solutions.
“Because of the benefits to mental health, flexible working should and can be facilitated in financial services, but without exposing individuals and businesses to the risk of non-compliance,” said Matt Smith, CEO of compliance technology and data analytics firm, SteelEye.
“Communications record keeping and monitoring rules are a key component of financial regulation and exist to ensure fair trading and stable markets.
“Firms with weak information barriers and internal controls governing the use of e-comms and other digital platforms need to carry out a comprehensive risk assessment and ensure they have oversight over all business-related communications,” Smith added.
Commenting on how firms can support flexible working while ensuring compliance, CEO of compliance chat solution, DeepView, Catherine Parry, notes that modern technology is key.
“Before enabling flexible working, firms must enhance their policies and processes with the capabilities they require to monitor the spread of information and identify potential instances of compliance breaches,” said Parry.
“With a particular focus on WhatsApp given the recent news of Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) penalties for tier-one banks.”
In the UK, the FCA has been clear that its expectations around capturing, monitoring, and archiving communications data apply equally to employees who are working from home or other remote locations.
In the US, the SEC has emphasised the need for firms to prioritise monitoring for material nonpublic information (MNPI) leakages and insider trading.
Consequently, firms should improve their internal controls or information barriers for digital communications if they want to continue to support flexible working.
