VoxSmart, the UK fintech for communications surveillance, has been boosted by the need to monitor the increasing number of capital markets personnel who have been forced to work from home.
Oliver Blower, VoxSmart
Oliver Blower, group chief executive of VoxSmart, told Markets Media that contingency plans usually expected staff to go work at another remote site. However, the coronavirus lockdown has meant that staff have instead been required to work from home, but firms still need to monitor their communications for regulatory purposes.
He said: “A Tier 1 Canadian bank wanted us to set up 500 users in 10 days.”
Blower continued that in recent weeks existing customers have requested additional licences and VoxSmart has had an influx of new customers.
“For example, one firm took two and a half years to implement Skype but installed Zoom and Microsoft teams in three weeks,” he added.
Regulators are giving firms some leeway but expects them to make efforts to comply with surveillance efforts as soon as possible.
https://twitter.com/ESMAComms/status/1240971205861150721
The European Securities and Markets Authority reminded firms of the MiFID II requirement to record telephone conversations.
“Esma also recognises that, considering the exceptional circumstances created by the COVID-19 outbreak, some scenarios may emerge where, notwithstanding steps taken by the firm, the recording of relevant conversations required by MiFID II may not be practicable,” said the regulator. “Firms are expected to deploy all possible efforts to ensure that the above measures remain temporary and that recording of telephone conversations is restored as soon as possible.”
The UK Financial Conduct Authority also said last month that firms should continue to record calls, although it accepted that some scenarios may make this not possible.
“Firms should make us aware if they are unable to meet these requirements,” added the FCA. “We expect firms to consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice communications. This could include enhanced monitoring, or retrospective review once the situation has been resolved.”
VoXSmart has more than 100 financial institution clients across the sell side and buy side, including Tier 1 institutions.
Blower said VoxSmart aims to be the single source that allows financial institutions to capture all types of communication - such as on mobile phones, via chat, email, Bloomberg - for surveillance purposes.
“Our differentiator is that we come from the financial industry and so we understand the problem," he added.
Blower had previously worked in fixed income, currencies and commodities at Barclays Capital and Bank of America Merrill Lynch before joining VoxSmart in 2014.
https://twitter.com/VoxSmartGlobal/status/1173985958842290177
Funding from NatWest
In 2014 VoxSmart developed new technology to expand beyond capturing voice communication under new leadership and with substantial seed capital. In 2016 the fintech raised $7m in a Series A funding round and launched the first WhatsApp and WeChat compliance capability for financial markets.
Last month Natwest Markets, the UK bank, invested £5.5m ($6.8m) in VoxSmart.
https://twitter.com/VoxSmartGlobal/status/1243130867393998848
The bank adds to the financing that VoxSmart received from Deepbridge Capital, an investor in UK technology companies, and other UK angel investors.
Blower said the funds will be used for sales and marketing, to hire staff, expand into new markets and increase product capabilities. Enhanced product capabilities include spotting that patterns of behaviour have changed.
“The first step is capturing the data and the second is seeing whether behaviour is different,” he added. “For example, if a trader suddenly stops communicating with a counterparty or alternatively, suddenly starts sending text messages.”
The chief executive is also eyeing potential acquisitions.
“In a crisis you can acquire good people and assets,” he added.
https://twitter.com/VoxSmartGlobal/status/1199984370397908992
For example, last year VoxSmart acquired Fonetic’s voice and electronic communications surveillance and trade reconstruction capabilities.
Spending on regulatory technology, particularly in surveillance, is expected to continue to grow this year according to a report from Greenwich Associates. The consultancy said trade and market surveillance technology is one of the most important compliance functions for market participants.
https://twitter.com/GreenwichAssoc/status/1225428555233996801
“Spending on third-party surveillance technology solutions is currently estimated at nearly $1.2bn globally and is expected to continue to grow at a double-digit rate through 2022,” added Greenwich. “In 2019, 70% of firms globally reported recent investment in surveillance technology.”
