The use of mobile communication by financial advisors has been a problem for compliance managers for so long. While it is true that a text message or a call can build a good relationship with the client, several incidents have occurred in the past where employees of financial firms have used unmonitored communication channels, particularly text messages, for inside trading and other such illegal activities.
Emails are still the official mode of communication in almost all organizations throughout the world. But text messages give ease of communication that emails cannot claim. Mobile instant messaging (IM) applications like WhatsApp, WeChat, Telegram, and Signal are newer communication channels that traders and brokers are interested in these days.
The use of text messages, particularly mobile messaging applications, can bring huge benefits for financial firms. But there is a time and place for everything. Employees must know the ideal time to email, call, text, or WhatsApp a client.
It is easier to have good client engagement with the use of mobile chat applications. Since many clients demand their financial advisors to communicate through WhatsApp or WeChat, the advisors are also forced to resort to these mobile chat apps even though their organizations prevent their use.
Financial regulators throughout the world require financial firms to retain all business records, including the communication of their employees with clients. The SEC Rules 17a-3 and 17a-4 and the FINRA Rule 4511 are such regulations that require all business communications to be retained. Regulators and legal bodies permit the use of text messaging in financial firms, but organizations must be capable of recording and archiving all such business communication.
Capturing mobile communication manually is a cumbersome task. During the early phase of the lockdowns imposed by the Covid-19 pandemic, traders were asked to write down and take snapshots of the communication they make with clients through unconventional communication channels. But this is neither a practical nor a permanent solution.
The problem of manually capturing employee mobile communication is that either the employee must turn on the capturing mechanism or another company representative must be present in the employee-client conversation. A rogue employee will never intentionally comply with such communication capture policies and may choose not to record their business conversations.
Even if the firm deploys a third person to manually record the conversation, there are still possibilities of human error. Moreover, most mobile messaging applications offer features like end-to-end encryption and ephemeral messaging. This means that traders can send messages to clients without the fear of a third individual decrypting the conversation, and they can also choose to send messages that are automatically deleted after a preset time. These mobile IM applications also allow users to delete messages that have already been sent, but that are sent only within a particular time limit.
Because WhatsApp and WeChat are used by clients, it is not possible to limit employees’ use of these platforms. Clients will leave a firm if they are not able to communicate with their traders through their preferred channel. Thus, the only viable solution is to capture mobile text and capture mobile calls and route them to the firm’s eDiscovery platform so the traders can use these mobile IM applications in a compliant manner.
Communication compliance must be taken seriously by companies. If an enterprise instant messaging tool is being adopted, it is crucial to utilize a tool to record calls and monitor text messages as well.
A recent memo issued by JPMorgan Chase & Co. asks its traders, bankers, financial advisers, and certain branch employees to collect all work-related text messages from their personal and work mobile devices. This includes messages from popular mobile IM apps such as WhatsApp and WeChat, which date back to early 2018.
Last year JPMorgan fired one of its senior-most credit traders and cut the bonus payments for a dozen of its other traders, for using a WhatsApp group to discuss market chatter. The recent memo could certainly be the aftermath of such events and these bankers can expect the text messages they collected to be produced before the bank.
A Jefferies Group banker also faced the wrath in the past for using WhatsApp when he had used the mobile chat app for boasting about the potential for an M&A deal to pay off his mortgage. This resulted in his resignation in 2016 followed by a penalty of $52,000 (£37,000) by the Financial Conduct Authority in 2017.
But manually capturing historic data can be a painful process. With the options of manual and auto-deletion of sent messages, employees can easily delete any evidence of malpractice. And this has happened in the past too.
The FCA had to let go of a former VTB banker who was charged with deleting WhatsApp messages in an insider dealing case. The FCA could not prove that the banker deleted the messages, knowing that the messages were relevant to the investigation.
It is not just financial firms that face the risks of text message deletions. The deletion of text messages by the Mayor of Seattle Ms. Jenny Durkan, as her phone’s text message retention period was set to 30 days has already put the Seattle City Hall in political turmoil. The deleted text messages were considered as potential evidence in a federal lawsuit against the city of Seattle.
Similar problems could manifest if employee mobile communication is not captured, or if the communication is captured manually.
TeleMessage provides a variety of archiving solutions that helps organizations capture mobile text messages and also to capture mobile calls. Instant messaging solutions from TeleMessage help organizations perform instant message archiving over popular mobile IM applications, and offer services like WhatsApp archiving, WeChat archiving, Telegram archiving, and Signal archiving.
With TeleMessage’s mobile archiving solutions, employee mobile communication is captured and archived automatically. This means that conversations are captured without the need of a third person manually pressing a record button. This allows financial firms to be compliant always.
Using an automated mobile archiving solution aids financial firms to ensure regulatory compliance and also helps traders to be present on the communication channel where their clients are, thus attaining client satisfaction and improving business.
TeleMessage captures and retains mobile content, including mobile SMS messages, voice calls, and WhatsApp, and WeChat conversations from corporate or BYOD mobile phones to ensure compliance with various data protection regulations. The messages are securely and reliably retained within TeleMessage servers or forwarded to your choice of archiving data storage vendor.
Our mobile archiving products securely record content from mobile carriers and mobile devices for various ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving solutions, you can always find the right tools or blend for your requirements:
- Network Archiver
- Enterprise Number Archiver
- Android Archiver
- WhatsApp Archiver
- WeChat Archiver
- Signal Archiver
- Telegram Archiver
TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website at www.telemessage.com to learn more about our mobile archiving products.