Why Reconciliation Is No Longer Optional In Regulatory Communication Data Compliance

In the highly regulated world of financial services, especially for broker-dealers and investment firms, maintaining complete and accurate records of regulated communications is more than a best practice — it’s a legal obligation. As communication volumes explode and firms adopt a mix of voice, email, messaging apps, and collaboration platforms, the compliance burden grows exponentially. Capturing the data is no longer enough. Regulators now expect proof of completeness — and that’s where reconciliation becomes critical.

The Regulatory Imperative

In the U.S., rules such as SEC 17a-3 and 17a-4 clearly outline what’s expected: financial institutions must preserve electronic communications in a tamper-proof, easily accessible, and comprehensive manner. Similar rules exist under MiFID II in Europe, requiring firms to record and retain all communications intended to result in a transaction — including voice calls.

But during audits and enforcement reviews, it’s not enough to have collected communication data. Regulators want firms to demonstrate completeness, consistency, and auditability. This is why reconciliation — comparing what should have been captured across communication systems against what actually resides in your archive — has become essential.

Without reconciliation, even a single gap in records can suggest a systemic failure in your recordkeeping controls — a costly and reputationally damaging outcome.

When Reconciliation Falls: Real Enforcement, Real Costs

In recent years, regulators have shown they’re not willing to compromise on data integrity. Some hight profile cases underscore the risk of failing to implement robust reconciliation controls.

In 2024 regulatory action from the Office of the Comptroller of the Currency (OCC) shows the critical importance of trade surveillance in maintaining market integrity. JPMorgan Chase Bank N.A. has been fined $250 million by the Office of the Comptroller of the Currency (OCC) for significant lapses in its trade surveillance program. These deficiencies, identified since at least 2019 to 2023, have highlighted the bank’s failure to adequately govern trading venues and ensure sufficient data controls—key components for effective surveillance.

The OCC’s findings revealed that JPMorgan Chase Bank failed to have surveillance in place over billions of trading activity instances across more than 30 global trading venues, a lapse attributed to inadequate governance and insufficient data controls. In response, the bank is now mandated to implement several corrective measures, including securing OCC approval before adding new trading venues and engaging an independent third party to evaluate its trade surveillance program comprehensively.

These enforcement actions sent a clear message – regulators do not just want good intentions or policy documentation — they want verifiable, repeatable proof that your firm has complete control over its communication records.

A New Standard: Proactive Compliance Through Reconciliation

Reconciliation is no longer optional — it is the linchpin of modern compliance. For voice communications especially, proactive compliance ensures:

• Enhanced Governance: Institutions must ensure that they have robust governance mechanisms over all trading platforms and venues they operate in or are active on.

• Data Integrity and Coverage: Adequate data controls and comprehensive coverage of all trading venues are non-negotiable to meet regulatory obligations and ensure market integrity.

• Continuous Improvement: The dynamic nature of financial markets demands continuous evaluation and enhancement of surveillance programs to adapt to new challenges and regulatory expectations.

Modern Solutions For Complex Problems

This is exactly what our CC1 Reconciliation layer is designed to solve. Tailored for financial institutions facing regulatory oversight, our solution provides:

• End-to-end visibility from call capture to long-term archive

• Daily automated reconciliation reports that highlight discrepancies and ensure completeness

• Trend analytics that track recurring ingestion issues or channel-level gaps

• Audit-ready documentation to satisfy internal governance and external regulators

Don’t Wait For The Regulator To Find The Gap

Compliance failures aren’t usually about what you know — they’re about what you missed. And increasingly, regulators are looking for proof that you didn’t miss anything. Reconciliation provides that proof. With our CC1 Reconciliation layer, your firm can proactively close the compliance gap, meet the highest standards of regulatory integrity, and build a communications governance framework that’s ready for tomorrow.

Contact us today to learn how we can help you strengthen your reconciliation workflows and transform compliance risk into operational resilience.