Audio surveillance and analysis: Sifting through the white noise

January 14th, 2015

Clutch AVP Rob Klapp discusses three tips to think about when building an audio surveillance program for your business. Read the full text below or read the article here.

As people become aware of the danger of memorializing things in written communications, sensitive conversations — the ones people would rather their bosses and regulators not hear — have moved to audio. As regulatory investigations intensify and as communications analysis becomes more sophisticated, audio is inevitably becoming a crucial and complex data source.

No one technology exists that can solve all of the issues surrounding audio data. And there’s no magic bullet to simplify the process of sifting through thousands of hours of calls to find key facts. As regulators expect corporations to effectively and thoroughly analyze their internal audio data, these institutions must understand this increasingly important realm of electronic data. This growing regulatory scrutiny begs a few questions. What should a proper audio analytics program look like? What are the full implications of audio data collection and review? How do you persuade internal purse string holders to spend money on building a defensible program?

Here are some things to think about when building an audio surveillance program for your business:

Understand your audio capture systems

Big banks are spending collectively up to $10 billion annually trying to keep abreast of regulators’ evolving mandates. Most of these costs, however, stem from purely reactive measures to comply with regulatory demands and investigations. The cost of extracting, searching, reviewing and analyzing even relatively small amounts of audio data during an investigation can be enormous. Not to mention the sunk costs of initial capture and subsequent storage. And as reviewers sift through thousands of conversations, they could discover that a large percentage of those conversations are simply white noise. That’s time and money wasted. Even worse, when banks receive broad subpoenas covering data and date ranges spanning multiple internal systems, retrieving that archived data can become an expensive, logistical nightmare.

When litigation or a regulatory investigation strikes, legacy, or inactive audio data may be extremely costly to restore or reconstruct, so it’s important to first understand all of your audio capture systems before prioritizing the collection of your data. Often the technical staff and software technicians who were experts in your legacy systems have long since left your company. The applications needed to work with the legacy data may have ceased to be supported or upgraded. Not understanding the universe of legacy data in your systems creates legal and operational risk for your business by hampering your ability to respond in a timely fashion to legal and regulatory demands. Building an effective remediation program for your legacy data and instituting an active, ongoing audio surveillance, capture and storage solution can avoid huge expenditures and costly fines. Once an effective system is in place, responding to unforeseen legal and regulatory surprises becomes much more manageable on both the cost and compliance fronts.

Another concern to anticipate is privacy. Employees may have major privacy concerns when it comes to audio surveillance, so it’s important to understand the evolving audio mandates and standards from regulators like the CFTC, FCA or CFPB in order to communicate the legality and validity of audio surveillance programs to employees. They may feel that their privacy is being compromised, so it’s important for C-level management to communicate why programs like these mitigate risk and are critical to the viability of your business. Audio surveillance programs are ultimately used to promote market integrity and protect customers, so make sure your employees know this.

Trying to stay ahead of the bad guys shouldn’t be as costly as it is. When building an audio surveillance program, think about working with regulators and other institutions to form a common set of mutually acceptable requirements. This sort of cooperation has the prospect of making the entire audio review process more predictable and less daunting. Look to programs that other industry leaders are putting into place and join forces. Open the lines of communication between you, your competitors and regulators to build out a consistent and manageable audio preservation program that builds toward an industry standard. Only after you’ve standardized your capture and preservation program processes should you then think about technical logistics like the most appropriate audio analysis tools for your business.

Internal buy-in

One of the most crucial parts of building an audio surveillance program (or any in-house program for that matter) is ensuring that internal stakeholders are on board and that they understand that the dollars spent are an investment in insurance against future legal and operational risk. Building a compliant culture through an audio surveillance program can help to catch small problems early before they snowball into big boardroom headaches, allowing for massive savings down the line. Starting with one program can lead to more openness for other programs later, which can create a more proactively compliant company culture.

As your company’s data and communications continue to grow exponentially, pressure from regulators will also grow. Developing and implementing a practical audio surveillance program to keep track of this overwhelming amount of data while keeping regulators at bay may appear to be an intimidating task at first glance, but keep in mind that starting from scratch doesn’t have to be the solution. Look into the programs already in place at other institutions and form a collaborative relationship with regulators. After all, if you can’t beat ‘em, join ‘em.