Protecting the truth in a shifting communications compliance environment
The UK financial services landscape has undergone a seismic transformation over the past 15 years, necessitating adaptation to emerging technologies, a rapidly changing policy environment, and new client expectations.
At the heart of this shift lies a fundamental principle: the preservation of truth. In an industry built on trust, ensuring that what firms are telling customers and colleagues is accurate, transparent and compliant is critical. Yet the rapidly shifting communications landscape creates new challenges for organisations striving to uphold this principle.
No one understands these challenges better than Smarsh, the trusted communications compliance partner to over 6,500 customers worldwide, including 80 per cent of the top global banks. A 2025 Gartner Magic Quadrant Leader for Digital Communications Governance and Archiving with over two decades of industry leadership, the company has had a front-row seat to the seismic shifts taking place across the industry.
“Compliance has evolved. It’s no longer just about reacting to regulatory pressure – it’s about staying ahead of risk,” said Tom Padgett, President, Enterprise Business at Smarsh. “Firms now face a new frontier: the explosion of informal communication tools like emojis, voice notes, and messaging apps woven into everyday workflows. At the same time, non-financial misconduct is in sharp focus, with the FCA spotlighting it through its recent Sexism in the City recommendations.”
Against this backdrop, regulators in the UK and Europe are intensifying their efforts to penalise non-compliance in communications capture. The staggering €5.65 billion in General Data Protection Regulation (GDPR) penalties issued to date serve as a stark reminder of what’s at stake.
With the pressure on, how can firms navigate this shifting communications landscape while ensuring compliance, fostering innovation and addressing emerging regulatory priorities such as NFM and the Digital Operational Resilience Act (DORA)?
The compliance challenges of today
Traditional compliance tools, while once effective, are now increasingly ill-equipped to handle the complexities of modern communication, and the sheer volume and variety of data generated by today’s workforce presents significant challenges.
Generative AI tools, such as Microsoft 365 Copilot and OpenAI’s ChatGPT, are transforming productivity by enabling employees to create content at unprecedented speeds. Gartner research indicated that more than 80 per cent of enterprises will have used generative AI APIs or deployed generative AI-enabled applications by next year. In addition, the Bank of England and the FCA found that 75 per cent of financial services firms already use AI.
However, this also generates a dramatic increase in the volume of data that firms must monitor and archive for compliance purposes. A single employee using such tools could easily double their content output, creating a compliance challenge of scale. To that end, Smarsh recently announced that through its integration with Microsoft, it can now provide its customers’ compliance teams with the tools to securely govern Microsoft 365 Copilot, significantly enhancing their productivity and enabling organisations to use AI safely, responsibly, and within regulatory guidelines.
What’s more, informal communication tools and styles are no longer on the periphery. Recent research from the company revealed that 57 per cent of employees use emojis in client communications, while 56 per cent frequently send voice notes for work purposes.
While convenient, it’s notoriously difficult to capture instances of misconduct in these formats. Recognising this, Smarsh acquired CallCabinet in February 2025 to bring advanced voice capture and analytics capabilities to clients. Smarsh models identify the language of interest and focus on the context rather than individual words to capture, flag and act on instances.
NFM, encompassing behaviours such as bullying, harassment and discrimination, is also now a regulatory priority. The FCA is expected to introduce new rules requiring firms to identify and mitigate these risks in the workplace, with communication channels being a core component.
Yet, despite the urgency, research from Smarsh in 2024 found that 63 per cent of UK financial services employees lack confidence in their organisation’s current monitoring systems. This is a critical gap, given that 66 per cent of employees support the use of AI to detect NFM: but the employee appetite and support for using technologies to detect such misconduct is there.
The implications of failing to address these challenges are severe. Beyond regulatory penalties, firms risk reputational damage, loss of talent and erosion of trust.
Innovative technology tools are the solution
The good news is that technology is evolving to meet these challenges head-on. The company offers cutting-edge solutions that capture communications across all digital channels in their native format, preserving metadata, attachments and context. This level of granularity is essential for ensuring compliance in a world where the “truth” of a communication often lies in its nuances.
“AI is fast becoming a powerful addition to the compliance toolkit,” said Lucy McNulty, Editor and Host of Following the Rules, who spoke at Smarsh’s Connect UK, the company’s flagship customer event for Europe’s top financial institutions. “By helping financial services firms sift through the vast volumes of content now generated by regulated staff and analysing both the content and tone of such communications, these technologies can enhance regulatory compliance by identifying potential risks early.”
This dual benefit underscores the strategic value of AI in compliance. Tools like Smarsh Enterprise Conduct are designed to monitor non-financial risks, such as inappropriate employee behaviour and cultural issues. As regulators increasingly focus on these areas, AI can identify patterns indicative of bullying, harassment or other forms of misconduct.
For example, it can analyse the tone of voice notes or the context of emoji usage to flag potential issues. Ultimately, these technologies help preserve the integrity of organisational culture and enable smarter business decisions.
Compliance as a growth enabler
With the right investment, modern compliance tools can serve as a catalyst for growth and innovation. Advanced compliance systems allow employees to communicate freely across a variety of platforms without fear of breaching regulations. This fosters a culture of innovation, where ideas can flow unimpeded. By addressing risks such as NFM, firms can build trust and transparency across teams.
This is particularly important in today’s workplace, where 78 per cent of employees say that knowing NFM is being identified and addressed influences their decision to stay with their organisation.
Modern compliance tools provide senior leaders with a comprehensive view of risks across the organisation. This holistic perspective enables proactive decision-making, reducing the likelihood of regulatory breaches and reputational damage.
“While AI-driven compliance tools offer tremendous potential, firms must have realistic expectations,” said Shaun Hurst, Principal Regulatory Advisor at Smarsh. “I’ve seen sophisticated systems generate thousands of false positives while missing genuine risks that require human judgment. Regulators want to see not just that you’re monitoring communications, but that you understand why alerts are generated and how you’re improving your program. Successful firms view compliance technology as an enabler of good governance, not a replacement for it.”
The employee perspective is equally compelling. Younger professionals, especially, are drawn to organisations that prioritise ethical behaviour and cultural integrity. Firms that fail to address NFM risk not only face regulatory penalties but also the loss of top talent.
As the discussions at Smarsh Connect UK reinforced, the shifting communications landscape presents both challenges and opportunities. On one hand, the rise of informal communication tools and generative AI has created a compliance environment that is more complex than ever. On the other hand, innovative technologies are empowering firms to turn compliance into a strategic advantage.
By modernising their compliance strategies, firms can meet regulatory demands, unlock new avenues for growth and, most importantly, preserve the truth. In a world where trust is the ultimate currency, the ability to capture, analyse and act on communications data is a business imperative. The truth, after all, is worth protecting.
This article is in partnership with Smarsh.