Mobile comms recording looms large

OvumAs the November 14 deadline for UK capital markets participants to record all their trader’s mobile communications nears, sniping between the various technology vendors intensifies with each highlighting the shortcomings of its rivals. Ovum looks at the real pros and cons at the current stage of development.
Our recent report, Mobile Communications Recording in the Financial Markets, identified three groups of vendors with differing technical approaches to meeting the regulatory requirement for recording introduced by the UK’s Financial Services Authority (FSA). Two of the three use on-handset software - one group uses call rerouting to a recording server while the other uses the conference call mechanism to “conference in” the recorder. The third group uses the actual SIM card in the phone to achieve the same objective.
Apart from how they actually do it, there are also differences in the way the technology is delivered. The software-based offerings tend to be a product that customers deploy and manage themselves, often routing the voice call part of the mobile communications to an existing recording server they already use for fixed-line calls, for which the FSA imposed a requirement in 2008. They can also be delivered as services, though that is not their primary route to market.
The SIM-based approach is currently offered by mobile virtual network operators (MVNOs), which provide it as a service, with the recordings being held, at least initially, in the service provider cloud even though customers can download the recordings to their own server and delete those in the cloud at their discretion. Because they come from MVNOs rather than mobile operators, the SIM-based solutions require a change of SIM card in each handset – [an] administrative headache if there are a large number of users in an organization.
Because mobile communications to and from a user’s phone will need to be recorded even when they are traveling abroad, roaming will be key. To achieve recording in roaming scenarios, the SIM-based services rely on a GSM standard called CAMEL (Customized Applications for Mobile network Enhanced Logic) [to root calls] to the MVNO network in the UK. CAMEL is a technology standard developed within the world of GSM telephony, initially to enable prepaid customers to roam onto other networks. Its use was subsequently extended to make it possible for any service specific to a subscriber’s home network to be available on the one they are roaming on. It is a mature technology and is supported by operators in 151 countries around the world, the latest of which is Australia where Vodafone is the first operator to support it.
Major absences from the list of countries of economic significance include China, South Korea and several Latin American countries, though Brazil and Mexico already have operators supporting CAMEL. This is clearly an important factor for organizations considering the MVNO route for recording but have reason for staff to travel to those countries on business.
The software-based offerings, on the other hand, suffer from the problems common to all mobile client technology. Each mobile operating system (OS) requires a specific client to be developed for it, and as each OS progresses through new releases it may require the mobile clients themselves to be upgraded or changed. The first of these problems is not quite as drastic in this case, because the vast majority of FSA-regulated institutions are using BlackBerry devices if they are using anything at all. It is a showstopper if an organization plans to move to iPhones, however, because as a result of the way that the technology currently works, and the way Apple controls its technology, it is not currently possible to develop an app for mobile comms recording for the iPhone.
There are also some specific shortcomings that the call rerouting and conference call groups within the software-based solutions bring up about each other, but these are less relevant to the current discussion. It is Ovum’s opinion that the relative ease of adoption of the SIM-based solution means that it behoves the software-based camp to point out any holes in their opponent’s argument, and of course, the lack of CAMEL support in China is key.
China does have its own CAMEL equivalent, which it uses to enable prepaid telephony…, so some form of gateway between the two technologies for the purpose of cross-support is a distinct possibility that requires a Chinese bank with operations in the UK to put pressure on its government and/or mobile carrier in China.
It is also interesting that at least one player in the software-based camp, Obsidian, has now launched a SIM-based alternative, and at least one other player is also working on one. Ovum suspects that a game-changing moment will come when a full mobile carrier, rather than an MVNO, launches a SIM-based solution, [which]  would obviate the need for a change of operator. The mobile call recording functionality might even be remotely activated, so that a capital markets entity could tell its mobile provider to switch on call recording for a particular sub-group within its organization, with no need to distribute a new set of SIM cards specifically to the people who are to be recorded.
The mobile comms recording market is evolving very rapidly and Ovum fully expects to see new technology vendors and service providers enter the fray over the next year or so. There is a good chance that some of the solutions they offer will be more elegant than those available today, and will better meet customer’s requirements. There is still the November 14 deadline looming, however, and Ovum recommends that capital markets participants do what they have to do in order to be compliant from day one, but strive for flexibility so that they can evolve their recording infrastructure to accommodate advances in the technology, or even swap providers, without too much trauma if something better comes along in a year’s time.