In response to financial regulations, TradeKing, the online broker dealer, has gone live with SunGard’s Protegent Social Media Surveillance product to monitor its employee’s activities on social media sites.
The Charlotte-North Carolina and Florida-based online broker is using SunGard’s Protegent to monitor its corporate Twitter account and Facebook page to make sure the activity is captured and, in some cases, that messages are pre-approved before they are posted. The firm must also avoid violating its key word lexicon and social media policies, according to yesterday’s announcement.
“What social social media has done is allowed us to communicate with the rest of the world through Facebook, though Linkedin and through Twitter, says Roberto Donovan Donovan, TradeKing’s chief compliance officer in an interview with Wall Street & Technology yesterday.
But those communications cannot be unrestricted.
While social media sites have become a tool for companies to market their brands and products to customers, these communications are subject to regulations. “FINRA and SEC regulations require that our communications with the public is not only reviewed, but captured and archived,” according to Donovan. In addition, FINRA requires that a principal of the firm —who is registered and licensed as a result of passing certain examinations— to review the messages, whether this is pre-approval or post-approval, says Donovan. Depending on the type of information, FINRA has different requirements. For instance, there are messages that are pre-approved and those that can be approved after the message is published. “Protegent helps us manage that type of flow,” noted Donovan.
Some of the information posted by employees on Facebook and Twitter could be deemed marketing. For example, as an options broker, TradeKing runs a lot of webinars to offer customers investment education on how to trade options. It may use Facebook to let clients know that it’s hosting the webinar and also during the event, clients can post comments or questions to Twitter, which serves as more of a customer service channel.
While TradeKing used to capture, archive the messages and take screen shots and do the pre-approval on its own. “It was a very cumbersome and manual process,” said Donovan. “If we wanted to scale, we realized we needed some technology behind it,” he said. It signed up for Protegent in October of 2011 and began using it right away.
After researching products in the market, TradeKing settled on Protegent as the most flexible and scalable and easy to use in the set up process, said Donovan. “When we have a new employee that comes on board, to set him up is just a few minutes, whereas on other systems we looked, we would have had to upload software on the user’s computer.”
The surveillance software is hosted by SunGard and permits TradeKing to monitor each employee without having to install software on each employee’s computer. According to Donovan, this was not the case with other software programs that the firm evaluated. “We don’t need to have the IT staff to monitor the computer of the employee,” shared Donovan.
Since going from a more manual process to an automated one, Donovan said, “It definitely made life easier for employees who monitored the social media channel and it saves time for them.” Compliance is also saving time since it had to make sure that a communication was captured, reviewed and archived in one platform. To automate the review process, “We get alerts that are synchronized with our email review system,” explained Donovan. TradeKing uses USA Net for email review and archiving and Intermedia, a Microsoft Outlook-based system for email.
While many individuals are using smart phones, like iPhones and Androids, to update their Facebook pages or tweet news to their followers, this is not a factor in Tradeking’s compliance strategy.
At this point, TradeKing’s employees are using PCs or laptops at the office during working hours. “We want employees to use these tools when they are at work and are using our computer network,” explained Donovan. Since TradeKing’s employees are not given commissions and don’t provide advice, once they leave the office, they are not working for TradeKing after hours. “I’m sure Protegent will allow for it, but we don’t see a particular need because of our particular business model.”