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The finance industry handles massive volumes of sensitive data.
We're talking about account numbers, bank statements, invoices, client information, and more, all of it highly confidential. This information could easily be misused, leaked, or manipulated if not properly monitored and protected.
It's therefore not surprising that the industry is governed by strict regulations. Agencies like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) enforce these rules to protect consumers and ensure transparency.
At the heart of these rules is WORM (Write Once, Read Many) compliance.
WORM applies to texts and call recording. In this article, however, we'll focus on WORM-compliant texting.
We'll cover:
- What WORM text archiving is
- Why WORM compliance is a necessity under SEC and FINRA rules
- The risks of non-compliant texting, especially with BYOD and personal devices
- How WORM storage protects message integrity and prevents tampering
- What features to look for in a WORM-compliant archiving solution
- How iPlum makes it easy for players in the financial industry to meet text archiving requirements
Let's start by answering the fundamental question.
Table of Contents
1. Why should financial firms care about WORM archiving?
2. How does WORM protect message integrity and support audits?
3. What are the penalties for non-compliance?
4. When can you use a phone system without a BAA?
5. How does iPlum ensure mobile texts WORM archiving?
6. How can your firm get started with iPlum?
Why should financial firms care about WORM archiving?
WORM-compliant archiving is a legal and operational necessity. And, firms that ignore these requirements risk more than just fines.
They compromise client trust, data security, and transparency in a highly scrutinized industry.
Here's why any serious financial firm should pay attention to WORM text archiving.
1. WORM archiving ensures compliance with SEC and FINRA regulations
WORM-compliant storage helps financial firms meet strict rules such as SEC Rule 17a-4 and FINRA Rule 4511.
These rules require the permanent retention of electronic communications. Regulators require these records to be tamper-proof and easily retrievable during audits.
Without WORM, firms risk non-compliance and hefty fines, regardless of whether you sent the message via email, text, or messaging apps.
2. It protects firms from data tampering and message deletion
WORM archiving locks messages in their original form, preventing employees from editing or deleting them after the fact.
In turn, archiving creates a clear, untouchable record of client interactions and internal communication. It also eliminates the risk of manipulation, protects against insider threats, and gives firms confidence that their data can withstand regulatory scrutiny or legal disputes.
3. It reduces the risk of off-channel communication violations
Off-channel communication — like texting from a personal phone — has led to millions in enforcement penalties.
WORM archiving enables firms to securely capture and store text, even on personal or BYOD devices. It helps eliminate regulatory blind spots and ensures that no business communication slips through the cracks.
4. It simplifies audits and accelerates response to information requests
When regulators request access to communication records, WORM storage enables fast, reliable retrieval.
Messages are indexed, searchable, and preserved exactly as they were sent. As a result, compliance teams can respond to audit inquiries or legal holds without scrambling through individual devices or relying on manual screenshots or backups.
5. It builds client trust and strengthens institutional integrity
Clients trust financial professionals who treat data security seriously.
By using WORM-compliant archiving, firms prove a proactive commitment to compliance and transparency. This not only reduces risk but also enhances reputation. It also helps firms win and retain clients.
How does WORM protect message integrity and support audits?
WORM-compliant archiving safeguards message integrity by locking records in place, exactly as they were sent or received.
It also makes them easy to retrieve when auditors come calling.
That said, here’s how WORM protects message integrity and supports audits.
1. It prevents tampering after messages are archived
WORM storage allows firms to write a message once, but read it many times without altering it.
This means messages can't be edited, deleted, or overwritten. Regulators and auditors view this immutability as a critical standard for trustworthy records. It also ensures that the data holds up under scrutiny during legal or compliance reviews.
2. It creates a permanent digital trail for each communication
WORM-compliant archiving systems maintain metadata — timestamps, sender information, message content — in a secure, locked format.
The digital paper trail verifies not only that a message was sent, but when and by whom. In addition, builds the kind of audit-ready transparency that satisfies even the most demanding financial oversight requirements.
3. It ensures consistency across devices and communication platforms
WORM storage captures and preserves messages uniformly, whether they are sent from a personal phone, a work device, or an app.
The structure eliminates gaps or inconsistencies in records. Plus, auditors get a complete, uninterrupted view of communication activity. That's impossible with manual backups or non-compliant tools.
4. It makes audit retrieval faster and more accurate
WORM systems archive messages in indexed, searchable formats, enabling compliance teams to quickly locate specific communications.
During audits, this can significantly reduce response times and prevent penalties tied to delayed or incomplete disclosures. It also allows teams to proactively monitor trends before they become compliance liabilities.
5. It reduces manual oversight and human error
Manual archiving leaves too much room for mistakes such as forgetting to save a message, misfiling records, or even intentional deletions.
WORM automation removes the human factor. Every message is automatically captured, securely stored, and locked for future access. This reduces audit risks and boosts internal accountability.
What are the penalties for non-compliance?
Failure to properly archive text messages can attract hefty penalties, negatively impacting your firm’s bottom line and operational credibility.
Below are some documented enforcement actions to show you how costly non‑compliance can be:
- FINRA fined Network 1 $400,000 for failing to review and retain electronic communications, including off-channel texts.
- FINRA fined a broker $10,000 and suspended him for using personal messaging apps and deleting business texts.
- FINRA fined a broker-dealer $100,000 for failing to supervise approved messaging platforms, resulting in unarchived business messages.
- SEC has issued $2.2 billion in fines since 2021 against more than 100 firms for off-channel communication violations.
These are not isolated incidents. The fines reflect a growing trend in aggressive enforcement around communication compliance.
Regulators are no longer tolerating informal channels or incomplete archiving, especially with the increase in mobile and personal devices for financial communication.
How does iPlum ensure mobile texts WORM archiving?
iPlum is keen to help financial service providers, such as brokers and advisors, meet regulatory requirements for WORM text archiving.
The platform does this by:
- Archiving texts in WORM format: iPlum stores every business text in a write-once, read-many format that prevents edits or deletion.
- Separating business texts from personal ones: iPlum adds a second number to a personal phone, keeping business communication siloed and compliant.
- Capturing every message automatically: iPlum automatically captures all incoming and outgoing texts in real time.
- Giving compliance teams full visibility: Admins can use a central dashboard to review, monitor, and control text archiving across the firm.
- Enabling fast retrieval during audits: iPlum indexes every message, enabling compliance officers to search and export records instantly.
- Offering long-term retention plans: Firms can retain texts for up to 10 years to meet SEC and FINRA standards.
- Encrypting every archived message: iPlum uses AES-256 encryption and enforces strict password policies to protect sensitive communication.
iPlum also improves how financial professionals communicate with clients and colleagues via text.
Users can schedule texts and set auto-replies for missed or after-hours messages. They can also pin important conversations and forward texts to email more.
Meanwhile, features such as HD call quality, bidirectional call recording, and dual-party consent announcements give firms more control over voice communication.
How can your firm get started with iPlum?
Getting started with iPlum is fast and straightforward.
First, choose the iPlum Enterprise plan, which includes WORM-compliant text archiving and other compliance features.
Then, set up your team by assigning each user a dedicated business line through the iPlum app, which is compatible with both iOS and Android.
From the centralized admin console, your compliance officer can configure retention settings, enforce password policies, and monitor archived messages.
You can also port existing business numbers into iPlum to maintain continuity.
With no new hardware required, your team can begin texting and calling compliantly from their existing devices within minutes.
Click the link below to sign up.
