How payment firms can ensure their websites remain regulatory compliant

By David Clee, CEO and co-founder, MirrorWeb

As I write this, the world is of course not only dealing with the health emergency caused by the coronavirus pandemic, but also trying to grapple with the economic emergency which the virus has sparked.

Indeed, the financial impact of the pandemic is dwarfing that of the 2008 global financial crisis, and looks set to be the largest contraction of economic activity for over 100 years.

Both the 2008 crisis and the Great Depression had another impact. In both cases, they led to regulators rightly taking a much closer look at financial services firms and whether they were compliant with the latest regulations.

But in recent years, the regulations which I have found many regulated FS firms (including payment firms) to sometimes be the least aware of, are those regarding their own websites.

So now would seem an opportune time to take a look at what the risk is, and what you can do about it.

The shift online   

The first thing to acknowledge is that the consumer shift to online shopping, banking and payments has of course posed somewhat of a dilemma for many regulated FS firms. If they develop their own websites and online channels, they have to make sure they are as diligent in ensuring compliance as they would be with other promotional materials; yet if they choose to limit their online footprint, they risk not keeping pace with modern consumer and client expectations of how a financial services (and especially a payments) firm should communicate.

Unsurprisingly, therefore, some regulated firms conclude that in order to minimise risk they should simply have a very limited online presence. However, this wouldn’t be a sensible communications strategy and minimising your online footprint does not guarantee that you would still be regulatory compliant.

That’s because, traditionally, many regulated firms have been unable to say with certainty exactly what has been posted on their online channels, on what dates and for how long.

Sound strange? Just think of the number of times a website gets updated with a new post, important documentation or promoting a new product or service. Can we always be sure that the promotion was explained in the right way? Were fees, fund prices or charges accurate at that time? And what if a customer alleges that they were miss-sold something because of incorrect information which they saw on the website? Can that be disproved?

The question becomes, therefore, how can regulated firms keep track of any of these potential regulatory breaches, so that they can rectify them and/or defend themselves when false accusations are made?

The answer is the ability to archive your entire website and online presence.

The response

Thanks to the vibrancy of the UK’s tech sector (and the fintech sector at that) a host of “regulatory technology” companies – regtechs – have emerged in recent years. These firms specialise in creating software to ensure that that firms – both new and established – are able to meet the modern regulatory requirements of the new online environment.

Indeed my own company MirrorWeb, having recently listed in the United States’ Finra Compliance Vendor Directory, has for some time been working with many established UK and European regulated firms, including Liontrust Asset Management, Tesco Bank and Zurich Insurance.

What we do is simple, but important. We provide regulated firms with a platform on which to archive their company websites and online channels, helping them to comply with current regulatory requirements set by the FCA, SEC and Finra.

By doing so, we help firms improve digital conduct and give them immutable records that not only show fair treatment of customers but also deliver confidence that they’re not going to fall foul of regulatory requirements. In fact, it’s the reason we’re trusted by the UK government to archive their websites.

The future

So where to do we go from here? Undoubtedly, the financial impact of the coronavirus pandemic which I wrote about at the beginning of this article means that financial regulations are sure to evolve in new ways over the coming years. Indeed, I would not be surprised if we see a further tightening of regulations surrounding online communications.

But however the regulatory burden evolves, the one thing that I would urge regulated firms to ensure is that they do not retreat in on themselves.

In a competitive landscape, there will always be firms who are keen to promote themselves online. The unscrupulous ones might make exaggerated claims.

And with so many people and businesses set for difficult months ahead, there will quite rightly be a renewed focus on whether regulated FS firms are telling the truth.

Therefore, the important thing is to ensure that a firm is always able to evidence what they communicated, to whom and when they did so.

In other words, they need the ability to ensure that their digital truth isn’t lost.

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