With over 2 billion daily active users, WhatsApp is the world’s most popular messaging platform. According to the company, on December 31, 2020, alone, WhatsApp racked up more than 1.4 billion voice and video calls in a single day — not to mention the tens of billions of daily messages sent over the platform.
Recently, WhatsApp dominated the news headlines due to its updated privacy policies and terms of service. Initially, these rules were set to come into effect in February, although they have now been pushed back to May to allow users to “review the policy at their own pace.”
For financial firms, the privacy policy changes aren’t the main issue at play. While WhatsApp remains the leading cross-platform communications tool for many, for those in financial services it represents a compliance risk, especially given the recent FCA, SEC and other regulators’ firm stand on mobile communication recording and archiving.
This risk, combined with the home working trends, as well as the greater dominance of mobile interactions and WhatsApp use by younger employees as well as customers creates a headache when it comes to potential compliance.
That’s a problem for firms who understand that due to global circumstances like the COVID-19 pandemic, these types of messaging platforms are here to stay. It’s a big reason why the recently announced TeleMessage partnership with Shield is so important, and why we believe it represents a significant game-changer.
The use of WhatsApp and other messaging platforms in finance
Many financial firms have historically banned the use of WhatsApp in a work context. Earlier this year, the Financial Conduct Authority warned firms to be careful about the “significant compliance risks” of encrypted or unmonitored communication apps, such as WhatsApp, when it comes to work-related information. In a message sent out in January 2021, the UK-based regulator noted that it has brought an action against firms in which users have unlawfully used such platforms as a way to make deals or offer investment advice. This could make WhatsApp a platform for potential market manipulation or other similar unlawful rogue activity.
Regulatory concerns about the perceived unrecordable and un-auditable state of WhatsApp messages and other similar communication platforms have already led to many businesses cracking down on their usage in the workplace.
In late 2020, two top commodities executives at Morgan Stanley left the company following compliance breaches related to the use of communication tools like WhatsApp — despite the fact that there was no evidence of wrongdoing, except for the use of the banned communication channels to begin with. Earlier that year, JPMorgan Chase fired one trader and cut the bonuses of at least a dozen others after they were caught using WhatsApp at work.
Alternate messaging platforms have led to similar results. In Singapore, BP parted ways with four trading and operations employees in the crude oil market due to their use of the popular WeChat messaging platform for discussing work.
Financial institutions are willing to hand out such severe punishments to set an example. Even in cases where no unlawful behavior was carried out using these platforms, there was the potential that it could have been. With regulators leveling ever-greater fines at financial institutions, the risk of using these tools and platforms is simply viewed as too great.
Things are changing with COVID-19
The COVID-19 pandemic has changed much about modern life and work. One of the things that no longer being in the same physical office has highlighted, is that communication platforms are an important part of doing business. As a result of the coronavirus crisis, many industry players have begun to move away from an outright ban of tools like WhatsApp to seek out better ways of being able to monitor these data channels to prove compliance.
This means that there has been a push for the adoption of WhatsApp as a legitimate communications channel — both internally with employees working remotely and, in some instances, as an instant means for employees to communicate with customers.
Guest blog by TeleMessage’s partner Shield focuses on the use of WhatsApp and other messaging platforms by financial institutions. The tool we have developed allows employees to use the native WhatsApp app on both mobile and desktop, but for these messages to be monitored by financial firms and, where relevant, recorded. It does this in such a way that only business communication, and not personal data, is recorded.
Once the data has been captured, a surveillance platform will apply its advanced rules. This involves a combination of Lexicons, AI and expert-driven rules, to pull the necessary behavioral and trade-related insights amidst the small talk that may proliferate in WhatsApp channels. A Hybrid Surveillance approach will link together data from myriad sources for monitoring and investigation purposes including structured sources such as Trade and Order data. Smart detection models and a proactive notification system will alert about possible risk, and help mitigate market abuse scenarios, ranging from collusion to insider trading. By teaming those capabilities with WhatsApp monitoring, compliance can now integrate this communication platform into the wider regulatory compliance process — enabling such end-to-end encrypted voice and chat eComms to become part of proactive surveillance reducing risk for financial institutions.
This is a great illustration of how cutting-edge surveillance tools can allow users to continue using new platforms like WhatsApp, without incurring added risk for their employers. As new communication channels grow in popularity and adoption, companies must make sure that they take the relevant steps to ensure that this type of data can be captured and easily searched, both manually and automatically, to detect potential issues. The results are a win-win for all involved.
This is a guest blog by:
Eran Noam, Chief Business Officer, Shield
Shield is a TeleMessage partner:
About Shield
Shield automates and orchestrates the complete eComms compliance lifecycle, delivering all elements of capture, correlation, data enrichment, analytics, proactive and preventative detection. Featuring two distinct functions – Compliance Data Management and Proactive Surveillance – Shield’s solution empowers numerous functions within regulated organizations, from departments such as surveillance and monitoring, risk and governance, forensic and control, all the way through to conduct and management.
A truly open platform, Shield was built to put an end to compliance data silos and complicated proprietary platforms. Our open integration approach enables an organization to connect to a wide range of electronic communications platforms through our library of pre-integrated connectors, whilst we normalize, enrich the data, and allow for connectivity to other platforms as well.
By harnessing the power of AI, Shield’s platform utilises its non-disruptive technology and unique capabilities, including FCR (Financial Context Recognition), Alert Scoring, and NLP. It is also a Cross Regulation Platform, enabling regulated firms to meet different regulatory use cases and objectives such as: record keeping and retention, completeness and reconciliation, eDiscovery and advanced search, investigations, and surveillance. For more information please visit: www.shieldfc.com
The following TeleMessage Mobile Archiving products are integrated with Shield:
