Company overview
In order to protect clients, wealth managers must implement compliance programs and policies to meet regulatory requirements. RegTech helps these firms to test compliance programs and identify gaps and risks. But many firms only realized the importance and positives of implementing a RegTech solution when the pandemic hit. In 2019, we identified through research that financial services firms were falling behind when applying technology to monitor conduct risk, employees' activities, regulations, and conflicts of interest across the organization.
Wealth Managers can exceed expectations using Novastone to complete fully compliant actions from the customer's phone or tablet, sharing documents, biometrics, and key data.
Admin teams can add, move and remove chat group members. Novastone's mobile and desktop app integrates with WhatsApp and WeChat for personal conversations in the chat channels that clients want to use. Novastone's secure messaging solution is fully auditable and with a compliance oversight to keep colleagues and clients safe.
Novastone has been selected to participate in the PWC Scale WealthTech 2021 cohort.
Thought leader
Douglas Orr, CEO, and Founder of Novastone, has over 20 years of entrepreneurial background, including multiple successful exits to companies such as GfK and Sungard. Douglas has founded world-renowned businesses with operations spread over many European countries and created revolutionary new technology in both the retail and financial industries.
What are your views and insights on the use of RegTech today in wealth management?
A key area of focus for wealth management businesses in 2021 should be the use of personal messaging by clients as it is causing wealth managers to respond in a non-compliant medium that typically has no oversight of client conversations and has no regard to data privacy and security.
As noted in Regulation Tomorrow, 12 April 21, there have been “a number of developments including recent guidance from the FCA which stated that it has acted against individuals and firms for misconduct which involved the use of WhatsApp and other social media platforms to arrange deals and provide investment advice and that it views such conduct as serious. The FCA expects this to remain an area of focus and has commented on the increased risk that employees may use informal encrypted messaging systems such as WhatsApp in a home working context and reminded firms of their continued obligations in relation to recording and monitoring such communications.
The ability to comply with record-keeping obligations in relation to less formal modes of communication is also an area of focus for US regulators. Last September the SEC fined a brokerage firm $100,000 when it was unable to provide copies of business-related text messages from personal devices despite a court order. This issue arose despite the fact that the brokerage firm had prohibited the use of unapproved communications, which was reinforced by annual compliance attestations and training.
It seems increasingly clear that it will not be sufficient for firms to simply rely on the fact that they have prohibited the use of personal devices and/or messaging systems such as WhatsApp for business purposes.“ This is a view with which I concur.
Novastone's secure messaging solution, designed for financial services, is an opportunity to meet your wealth clients in the communications channel that they want to use while providing full compliance, audit trails, malware detection, and real-time DLP services for all conversations and attachments sent via the Novastone platform.
The benefits for wealth management businesses using Novastone's solution are that it is:
SIMPLE - Quick and easy to set up and manage, colleagues can join and leave conversations at appropriate stages of the customer journey, reducing stress for customers and colleagues.
PRIVATE - Transparent and secure communications between customers and the wealth management business and secure storage of all communications. There is total protection against all security threats, including malware in attachments, and the option for real-time protection against inappropriate language, concepts, sending incorrect attachments via incorrect channels.
TRUSTED - Confidentiality, integrity, availability & authentication assured using existing client data.
INTEGRATABLE - Seamless ownership of customer process from initial enquiry to the resolution that integrates with backend systems.
From a client's perspective, they can interact with their wealth management advisors through an instant messaging experience they love (including WhatsApp & WeChat) and have full visibility of their conversation history. Clients can also download the Novastone app (White labelled) for additional capabilities, e.g. transaction authentication. Clients that interact with multiple parties or departments have different threads for each topic. The wealth management business becomes more accessible to clients, eliminating phone queues. Novastone provides a low friction experience for many everyday wealth management tasks.
Novastone enables regulated and certified wealth management advisers seamlessly to chat and share confidential files with colleagues across multiple chat platforms and chat in a trusted channel with external clients for those personalised conversations that matter the most.
What solution(s) does your company offer the market and how do they help wealth management firms manage their risk and compliance obligations in a better way?
Novastone is a messaging solution designed to enable instant messaging communication externally (B2B and B2C) and internally within regulated industries, such as wealth management, ensuring full compliance with regulatory obligations.
Novastone provides data in transit encryption and FIPS 140-2 compliant cryptographic key management that's all hosted on a secure cloud platform while also providing full compliance, audit trails, malware detection, and real-time DLP services for all conversations and attachments sent via the platform.
Our unique patented architecture and integrations into 3rd party instant messengers such as WhatsApp & WeChat establish Novastone as the ideal tool to drive increased client engagement, speed up workflow automation & ensure all client conversations are fully compliant within their regulated sector.
Our platform empowers organisations to drive towards their sustainability and environmental targets by reducing paper forms, moving more processes into biometrically authenticated forms via IM chats resulting in reduced email traffic and productivity gains.
The Novastone solution can be entirely delivered and managed by a customer's own tech teams via a Novastone installation on your own AWS Cloud, where Wealth Management businesses will control the encryption keys and have data sovereignty.
Novastone enables wealth managers to reduce the security and data privacy risks faced with clients using personal instant messaging apps to converse with relationship teams, protecting the wealth management company and its reputation.
Novastone brings customer-centricity back to wealth management, allowing relationship managers and client service teams to chat directly to clients using personalised secure messaging.
This article was originally part of our Wealth Tech Views RegTech Report. Click here to access the full report.
