GreenKey Blog: MiFID II & Trade Reconstruction: Plugging the gap in voice communications
The successor to the EUs Markets in Financial Instruments Directive, MiFID II, will soon introduce a raft of new obligations to financial institutions. Among these are the record-keeping of communications, voice recording calls and the ability to reconstruct trades and client interactions.
Specifically, article 16(7) states that a firm's records must include recordings of telephone conversations, all electronic communications and minutes of any in-person meetings and discussions related to the reception and transmission of orders, the execution of orders on behalf of clients and personal account dealings. One of the key objectives of these tighter regulations is to be able to reconstruct a trade from all the constituent parts of the deal as and when requested.
The challenge for many in compliance is that while existing voice recording systems may be in place, these ageing systems come with a stack of legacy issues that leave a firm with huge challenges using them for supervision and trade reconstruction.
Examples of such weaknesses include poor quality and incomplete recordings, unidentified participants, incomplete or missing metadata, zero insight into the content of conversations and excessive compression resulting in an inability to process within existing compliance surveillance technologies.
So where can GreenKey help plug these gaps with existing voice technology?
- GreenKey digitizes voice. Call quality is near perfect with the use of Opus codecs for high definition audio which allows for higher bitrates than G711, G722, AAC and MP3.
- GreenKey’s recordings are complete. Legacy systems typically segment call recordings for space and compression requirements. Recompiling those into a coherent, complete recording is often problematic. GreenKey eliminates this with complete recordings of entire conversations.
- GreenKey offers voice biometric verification, CRM by voice or phone line recognition, relationship mapping and attribution, which all contribute to increased visibility into call participants
- GreenKey’s voice transcription accuracy rates top 97%, providing unrivalled insight into the content of conversations. These can then be utilised by existing surveillance technologies for supervision, analysis and behavioral analytics. Remember that MiFID II requires call recordings to be retained for a minimum of 5 years, so there is no longer any advantage in not transcribing conversations.
- GreenKey allows users to augment call data with free-text comments/metadata for future search & retrieval. E.g., a call involving Market Sounding can be tagged for reference and aid inclusion in any reconstruction.
By addressing these significant technical challenges, GreenKey enables rapid and accurate identification of relevant conversations to be included in the reconstruction of trades and client conversations.