Messaging apps like WhatsApp, Signal and Telegram are usually free to download and use. But their use among global banks for business dealings has resulted in regulatory violations and over USD$1 billion in U.S.-issued fines. Now, regulators are toughening their stance.
“Financial firms face an extra layer of complexity when it comes to collaborative communication tools,” says Maurisa Baumann, Head of Desktops & Feeds Products at ICE. “In addition to a messaging system that streamlines internal workflows, they’re also looking for a tool that enables efficient and transparent price discovery and meets record retention requirements”.
SEC and CFTC rules require banks and broker-dealers to maintain and preserve certain communications, as such records are a means of monitoring compliance with investor-protection laws. The use of messaging apps on personal devices grew across the finance sector during the pandemic, as traders and brokers sought to keep in contact with clients while working remotely.
The issue isn’t isolated to the big banks; asset managers are now scrutinizing their employees’ use of personal and social messaging apps, with reported probes from regulators1.
The recent events and increasing trends of regulatory scrutiny and oversight emphasize the need for a purpose-built messaging platform for the finance sector. “A messaging platform that was purpose-built for the financial services industry is critical for traders and risk managers,” continues Baumann. “In addition to having built-in functionality to help firms achieve compliance, a messaging system designed for the financial community has an inherent commitment to continue evolving to meet new regulatory standards.”
While in-house compliance and security policies may vary between firms, the regulatory needs of marketplace participants include:
Our robust chat app offers diverse set up options that can be tailored to support your compliance requirements.