Email Monitoring

One of the recent hot topics is whether the leading role of New York Stock Exchange has been challenged by London Stock Exchange and even HKEx. New York's Economic Development Corporation last month appointed McKinsey to research whether stiff US regulations are driving companies to list in London rather than New York. Sarbanes-Oxley Act is one big headache. Another concern may be the monitoring of electronic communications.

Today's businesses have relied heavily on e-mail as their primary business communication channel. While in the past firms in the finance sector were only required to monitor the telephone lines, now email monitoring is becoming another area of concern.

A survey was recently conducted at the same time for 300 people working in two of the world's busiest financial districts (New York and London), which revealed a key difference in regulatory compliance culture.

The survey discovered that:

• In New York more than 60% of respondents thought that it was right that their employer should monitor their e-mails. By contrast, in London only 38% supported their firm's right to monitor e-mails.
• Employees in the New York are under heaviest scrutiny. In New York 74% of respondents who worked in the finance sector thought their e-mails were already monitored, compared to 62% of London finance workers.
• New Yorkers are more likely to circumvent e-mail monitoring: 60% admitted that they had sent something that they "didn't want their employer to know about" using webmails. This compared to 42% of London respondents.
• More than 70% New York-based finance workers admitted they had received an e-mail that broke corporate or regulatory policies, compared to just 36% of London City employees.

The differing regulatory environments between New York and London may lead to the difference in competitive advantages. While it is unlikely US would relax its regulations, it should consider simplifying the compliance procedures. To strike a balance between regulatory compliance and privacy, technology should be creatively used to effectively manage communication and enforce good messaging governance.