- Regulatory fines for deficiencies in electronic communication surveillance surge by 602% to $666 million in Q3 2024, as the FCA launches a probe into UK firms’ monitoring of encrypted communications.
- To help combat this, eflow introduces upgrades to its TZTS and TZEC regulatory technology, offering seamless integration of eComms and trade data to enable holistic market abuse surveillance.
eflow Global, a leader in regulatory compliance technology, has today warned European financial firms to brace for a substantial increase in regulatory enforcement action related to off-channel communication monitoring, particularly in the wake of heightened scrutiny from global regulators.
Regulatory penalties surged in Q3 2024, with a particular focus on the risks posed by unmonitored communications channels such as WhatsApp. $666m of eComms-related fines were issued by regulators between July and September 2024, compared to $176m in the whole first half of 2024. The majority of this enforcement action was taken against US firms, underlying eComms oversight as a critical regulatory focus area in North America.
This heightened scrutiny is now spreading to Europe and the UK, where the FCA has launched proactive investigations into banks’ communication practices, with broader financial institutions likely to be targeted next.
As European regulators prepare for further crackdowns, eflow has upgraded its TZTS and TZEC platforms, enabling seamless integration of eComms and trade data to help institutions stay ahead of evolving compliance standards.
Ben Parker, CEO and founder of eflow Global, commented: “With regulatory scrutiny of eComms surveillance increasing, firms need to act now to avoid the hefty fines we are seeing in the US market. As regulators ramp up enforcement action globally, financial organisations can’t afford gaps in their compliance frameworks. At eflow, we remain committed to equipping the industry with the tools it needs to stay ahead of evolving standards and avoid costly penalties.”
The latest enhancements to TZTS and TZEC see the full integration of the two systems, enabling firms to map their trade and communications data quickly and efficiently. This helps regulatory professionals to ‘join the dots’ between suspicious messages and potential instances of market abuse, while machine learning identifies the linguistic and behavioural trends that can act as ‘red flags’ to predict non-compliant activity in the future.
For an update on Q3 global regulatory enforcement read here, or for details of TZTS and TZEC, visit the eflow website here.
About eflow Global
Founded in 2004, eflow Global provides financial firms with technology solutions to help them comply with their regulatory requirements in a more streamlined, efficient and robust way. It offers award-winning solutions for market abuse surveillance, best execution, transaction-cost analysis, transaction reporting and eComms surveillance. The company currently services over 130 clients across five continents, providing both buy-side and sell-side firms with highly configurable digital tools that are designed to keep them compliant and competitive in this ever-changing regulatory landscape. eflow’s regulatory solutions are delivered through a PATH, a unique digital ecosystem that offers the speed, convenience and efficiency of off-the-shelf software, combined with a level of customisation that is typically only associated with a bespoke platform. https://eflowglobal.com/
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