WhatsApp has been in the spotlight lately due to controversies it faces regarding privacy, data protection, terrorism, and the oblivious government personalities using the app for their own agendas. Much of the debate on WhatsApp’s legality in some countries and industries has centered so far on these issues, yet few realize how this app also increases the potential for crimes in the financial sector.
If you still think that trade abuse and market manipulation only takes place via physical interactions and traditional channels, then it is time for you to reconsider your risk management and compliance approach. The reality is that these financial crimes have been flourishing through mobile channels, especially on WhatsApp – with the case against ex-Jeffries banker being the most notable one.
All manner of professionals in the financial services now collaborate via encrypted networks, which only makes it imperative for organizations to invest in a system that can capture and record WhatsApp chats. This need has only exacerbated, thanks to the technological developments being introduced in the app, scarcity of reliable solution provider in the market, and increasing compliance pressure from regulatory and legal bodies.
Here are the top challenges that make WhatsApp archiving and monitoring a must in all financial institutions:
- Increasing WhatsApp Complexity
As WhatsApp gains more traction among advisors, dealers, and private banks, the company has seen an opportunity and decided to develop more features specially engineered for this industry. Hence, they introduced WhatsApp for Business and WhatsApp Chat Banking,both of which aim to enable financial professionals to communicate and deliver services to their clients all with just a few taps on their smartphones.
Even the consumer-grade version of the app has been known as a compliance and eDiscovery headache, even for agencies such as FBI. In their blog, WhatsApp founders Jan Koum and Brian Acton wrote, “No one can see inside that message. Not cyber criminals. Not hackers. Not oppressive regimes. Not even us.”
If a federal agency such as FBI has no way of accessing communications transferred through WhatsApp, it means that mere financial organizations would have even more trouble in trying to do the same — unless they use a solution that could instantly capture and archive WhatsApp chats as they are sent and received on the mobile devices of their employees.
- Ever-Increasing Regulatory and Legal Standards
Over the years, financial regulators – including FINRA, CFTC, FCA, and ESMA – have begun expecting firms to have a complete surveillance strategy leveraging multiple sources, including archived WhatsApp chats for identifying potential trade abuse.
FINRA’s Regulatory Notice 17-18 states that “every firm that intends to communicate, or permits its associated persons to communicate, with regard to its business through a text messaging app or chat service must first ensure that it can retain records of those communications…”
Laws such as the Dodd-Frank Act also require financial firms to comply with the “trade reconstruction” standards, which only provides firms 72 hours to produce all documents and communications related to a trade/order in a chronological manner.
Without a mobile archiving solution that can capture and record WhatsApp messages, financial firms will not be able to satisfy the increasing complexity of record retention laws and standards. And as the recent enforcement actions of the regulators show, failure to maintain complete and reliable records of trade-related communications can lead to serious fines and hefty penalties.
- Ineffective Data Management for Monitoring
The pressure to comply with new regulatory standards has resulted in many companies implementing fragmented and tactical approach in communications archiving and monitoring, rather than to adopt holistic strategies that can and will be effective over the long-haul.
Moreover, many financial organizations still rely on legacy systems that can only record and monitor emails sent or received on desktop computers. A mobile recording and monitoring solution that features WhatsApp archiving is likely non-existent, and the idea of monitoring and capturing WhatsApp chats in real-time is never discussed.
This results in many firms using WhatsApp being unable to link chat messages with other mobile channels used by their employees when transacting with their clients, including voice calls, which still constitute the most common channel identified with trade/market abuse.
Such is evident in some organizations that still store their captured text, emails, voice call recordings, and WhatsApp chats in disparate databases, and still use different monitoring platforms for each silo. Archiving and monitoring WhatsApp chats separately from other mobile channels inhibits the company’s ability to understand the full context of the flagged conversations.
This can ultimately lead to non-compliance charges since most regulators require firms to have a sufficient supervisory system that will allow them to review trade-related communications in an effective and complete manner.
For financial firms that know only to capture mobile SMS and record phone calls, seeking a new solution that also has the capability to archive WhatsApp can be extremely challenging. Fortunately, there are vendors offering a complete mobile archiving solution that can also capture and record WhatsApp chats –such as the TeleMessage WhatsApp Archiver.
TeleMessage’s WhatsApp Archiver is a unique platform tailor-made to solve compliance and regulation issues by allowing firms to capture and archive WhatsApp messages.
This platform works exactly like the standard WhatsApp application, ensuring that your employees will still be able to send work-related communications easily and quickly.
The benefits of using WhatsApp Archiver in your business include:
- Archive all WhatsApp communications
- Use WhatsApp to communicate with customers, employees, and stakeholders
- Search, track and retrieve WhatsApp messages in the corporate archive
- Deposit WhatsApp messages with any email archiving vendor
- Full administration and reporting
The TeleMessage WhatsApp Archiver is the latest addition to our mobile archiving solution that securely captures content from mobile carriers and mobile devices for a variety of ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving methods, you can always find the right tools or blend for your requirements:
TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website today at www.telemessage.com to learn more about our mobile archiving products.