What Firms Need to Know Amid Regulatory Shifts & a New SEC Chair

Monitoring employee communications used to be relatively straightforward — emails, calls, maybe the occasional text. But in 2025, the compliance game has changed dramatically. With the rise of platforms like WhatsApp, iMessage, Slack, and a constant stream of emerging communication tools, the term “off-channel communications” has taken centre stage in compliance departments globally.

Financial institutions are facing the reality that record-keeping failures aren’t just costly — they’re reputationally devastating. And with the SEC levying over $2 billion in fines related to communication monitoring failures since late 2021, the pressure is real.

Regulatory bodies, especially in the U.S., have been cracking down on off-channel communication violations with unprecedented vigour. The SEC’s stance has been clear: whether a message is sent via WhatsApp, Telegram, or Snapchat, if it relates to business, it must be captured and retained.

Big names haven’t been spared — JPMorgan, Goldman Sachs, and Morgan Stanley have found themselves on the receiving end of hefty fines for failures in record-keeping.

And notably, in a recent development, a group of 16 financial firms attempted to renegotiate their settlement agreements with the SEC, arguing that firms who settled later received more lenient terms. These firms asked for key requirements — including independent compliance consultants and detailed employee disciplinary reporting — to be removed. The SEC denied the request, emphasising that “settlor’s remorse” is not a valid reason to modify a final agreement. This firm stance underscores the Commission’s commitment to holding companies accountable, regardless of evolving enforcement strategies.

The U.S. Senate has confirmed Paul Atkins as the new chair of the SEC. Known for his conservative regulatory approach and past tenure under the Bush administration, Atkins is expected to pivot away from the agency’s recent focus on supervisory failures (like off-channel communications) toward enforcement where there’s clear investor harm.

This shift could mean fewer sweeping enforcement actions solely based on communication violations. However, don’t expect the pressure to disappear completely. Atkins will likely adopt a “back-to-basics” approach — focusing on fees, disclosures, and valuation — but off-channel communication rules will still feature prominently in examinations.

While the U.S. has led with high-profile settlements and billion-dollar fines, the U.K. has shown signs of following suit — albeit more cautiously. Ofgem’s £5.4 million fine against Morgan Stanley for WhatsApp-based trading messages marked the first of its kind under REMIT regulations.

However, U.K. regulators are not yet as aggressive as the SEC. That may change. With political uncertainty mounting and a potential tightening of regulations across Europe, firms operating in both regions should prepare for stricter oversight.

Today’s most effective compliance tools are cloud-based, centralised platforms that provide access to real-time surveillance across communication channels. These platforms offer a “Single Pane of Glass” for employee communication — streamlining oversight, improving transparency, and significantly reducing regulatory risk. In a world where data can disappear in seconds, centralised, auditable, and tamper-proof systems are no longer a luxury — they’re essential.

With Paul Atkins stepping into the SEC’s top seat and the political winds shifting, firms may hope for a regulatory breather. But that would be a mistake. Regulatory expectations around communication retention are entrenched, and even if enforcement shifts, the obligation to comply won’t.

The SEC’s rejection of attempts to modify earlier settlements sends a clear message: accountability will remain, regardless of who is in charge. Firms that failed to implement appropriate communication monitoring systems will be held to their commitments, even as others negotiate new terms.

Financial firms must accept that monitoring communications isn’t a one-time investment — it’s a living, evolving function. The only sustainable strategy is embracing robust, scalable SaaS platforms that can adapt as quickly as the communication landscape itself.