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By Paige Jones Outreach

WORM Compliance in the Financial Services Industry: Everything You Need To Know

5 minute read
WORM Compliance in the Financial Services Industry: Everything You Need To Know Featured Image

As a financial advisor, you work with highly sensitive and private information every day. Account numbers, cardholder data, bank statements, and the list goes on. Because this information needs to be protected, the financial services industry has built a wall around it in the form of regulation.

The backbone of this regulation happens through the archiving of electronically stored information through WORM compliance. While this might all sound super complicated, compliance is crucial for your advisory firm to understand and keep up with. Let’s tackle it together.

What is WORM Compliance?

WORM Compliance is the archiving of files in a format that cannot be altered, which prevents editing, overwriting, renaming or erasing the records. This eliminates the risk of them being tampered with in any way possible. It also help protect data integrity, ensure market transparency, and avoid data breach incidents. This means if electronic storage media is used by a member, broker, or dealer, it must be preserved in a non-rewriteable, non-erasable format.

Compliance for financial advisors is regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchanges Commission (SEC).

When Is It Needed?

Pretty much any communication through technology will require WORM compliance. In today’s digital age, that spans over a variety of platforms. Financial planning firms are still required to store their business-related text messages and voice calls using WORM technology, but all new digital communication platforms are also regulated. If it can be seen as communication, it probably needs to be archived.

Financial firms are required to retain records of all social media communications. This applies to any social media platform you’re on – LinkedIn, Facebook, Twitter, Instagram… all of them. All social posts are considered written material that need to be preserved. All email communication (including email marketing), blogs, and website communication also need to be archived for compliance. 

Non-Compliance Penalties

Ensuring the integrity of personal records is critical to investor protection, which means regulatory agencies are very strict. Non-compliance can result in serious penalties, and compliance is always more cost-effective and easier on business than fines and sanctions. In 2017 alone, FINRA fined 12 companies for a total of $14.4 million for deficiencies in the preservation of broker-dealer and customer records. Clearly, the time and effort that WORM compliance takes is well worth it.

Archiving Tools

Since WORM compliance has a lot of details and there’s a threat of serious penalties, it’s important to find a storage system you trust. Here are just a few we recommend:

1. Twenty Over Ten

Twenty Over Ten’s Providence Platform creates an archive of every publish for every site using WORM storage. Compliance teams have the ability to search through an individual advisor’s archives and access both a printer-friendly version and a fully functional representation of an archive with a single click.

2. Smarsh

Smarsh supports over 80 communication channels with direct source capture across email, IM and collaboration, social, mobile, voice and web. Content is captured in its native format, retaining and presenting messages in their original context. Upon ingestion into the archive, content is automatically indexed and made searchable.

3. Tele Message Mobile Archiver

With TeleMessage Mobile Archiver, financial firms and public agencies are not only able to capture and retain text messages, voice calls, email and other types of mobile content in real-time but also store them in a WORM-compliant medium.

Interested in learning more about Providence or want to try it out for yourself?
Contact us at hello@twentyoverten.com to book a demo or to get started.