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Warning of backlash on financial trader mobile recording software

Analysts predict strong resistance to new FSA regulations

Financial services institutions are at risk of a serious backlash from traders over mobile phone call recording technology made compulsory by the Financial Services Authority, according to analyst house Ovum.

In its 'Mobile Communications Recording in the Financial Markets' report, Ovum said companies covered by the Financial Services Authority (FSA) requirement to record all mobile communications to and from their traders should be wary of installing "an obtrusive system". The rule comes into effect this November.

But apart from the obvious element of many traders being likely to resist having even their mobile calls recorded, on privacy grounds, Ovum said that making a call could become a hassle and this could bring about the most resistance. Avoiding a poor user experience should be a high priority for financial services institutions affected by new mobile recording regulations, it said, or they could "risk driving their traders away".

"While regulators require total compliance, the actual companies involved must also consider the quality of the user experience, given that their traders are some of their highest paid and most valued employees," said Ovum analyst Rik Turner.

"A poor user experience on a recorded mobile device could irritate them and potentially contribute to an eventual decision to leave."

The report advises that the user experience for the traders, their customers and any other parties that will be affected, must be as close as possible to that of a mobile phone connection on which no recording system is deployed.

The report finds that data communications between traders and their customers do not present a great problem in ensuring continuity of the user experience when it comes to their recording.

However, the report states that voice calls present more of a challenge, and connection delays as the recording technology begins to work "will be inevitable" with the majority of technical approaches.

Turner said, "On inbound calls, if the delay is too long, then there is a real risk that the caller will simply give up on the attempt to call. If this is a potential client, it is a strong possibility that they will take their business elsewhere. When it comes to outbound calls, if they consistently take too long to complete, a trader will become disgruntled and the problem may contribute to them leaving the company."

Ovum said the mobile recording technology market was "in rapid evolution" with new vendors and service providers, as well as new technological solutions, emerging all the time.

The report recommends that companies take a "two-step approach" to mobile recording, in order to ensure they have a system in place for the November deadline. But they should also keep their options open for moving to a more cost-efficient and user-friendly method later on, it said.

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