Banks falling behind on messaging app scrutiny

Global financial companies are falling behind on the monitoring and archiving of all business-related communications using personal messaging apps, a survey released on Wednesday showed, potentially running the risk of regulatory breaches and fines.

The Annual Compliance Health Check by data compliance firm SteelEye found 63 per cent of some 400 compliance executives in the U.S., Europe and Asia Pacific said they were not monitoring staff usage of WhatsApp for compliance purposes.

Just 27 per cent said they were investing in communications surveillance capabilities. More than a third said turbulent geopolitics and higher-for-longer interest rates had led to the scrapping of technology projects to support compliance.

The U.S. Securities and Exchange Commission (SEC) kicked off a sector-wide crackdown on business-related text messages over personal messaging platforms in the wake of the COVID-19 pandemic, amid concerns texts were going unrecorded.

Some of the world’s largest banks including JP Morgan, Morgan Stanley, UBS, Goldman Sachs and Citigroup have been fined hundreds of millions of dollars after admitting compliance failures in this respect.

Total financial penalties linked to record-keeping missteps across personal messaging tools exceeds $2 billion, SteelEye said.