Only half of financial institutions (51 per cent) are monitoring employee communications over WhatsApp, according to compliance solutions provider, Shield and LeapXpert, the responsible business communication pioneer. Even fewer institutions capture SMS, iMessage, LINE, WeChat, Telegram, and Signal.
The report reveals that while virtually all compliance officers surveyed plan to monitor WhatsApp and other messaging apps by the end of 2023, 73 per cent of financial institutions still lack confidence in their ability to enforce bans on mobile communications over unapproved channels. This continues despite heavy fines being issued by US regulators for failing to limit employees using messaging apps on their mobile devices.
Last September, an SEC probe found that from 2018 to 2021, employees at several leading banks frequently used off-channel communications to conduct business. In the last 18 months, $2billion worth of fines have been levied at more than a dozen financial firms.
Surprisingly, multi-million-dollar fines do not occupy the top spot among the concerns of compliance professionals. They come in second place with 34 per cent of respondents selecting them as the top concern. The greatest fear revolves around regulatory audits themselves with a significant 64 per cent ranking them as their primary concern. Internal audits follow behind at 32 per cent, while concerns about reputation damage stand at 28 per cent, and losing business data at 27 per cent.
Other survey findings:
- Fifty-seven per cent of US companies are already monitoring WhatsApp compared to 44 per cent of their EU counterparts.
- Respondents expect a shift in mobile device policy, rising from currently 53 per cent issuing corporate devices to 66 per cent in 18 months.
- While only an average of 29 per cent of respondents reported monitoring WhatsApp, SMS, iMessage, LINE, WeChat, Telegram, and Signal at the moment, this is set to skyrocket to an average of 90 per cent by the end of 2023.
Mitigating communications compliance risks
“When the massive SEC fines were issued, it seemed imminent that widespread changes across the industry would occur,” said Shield co-founder and chief business officer Eran Noam. “Our report shows that this has not happened. While data capture, monitoring, and user experience challenges are real, confidence in banning policies is low.
“Technology gives companies the option to monitor these channels rather than simply implementing policy bans, which don’t provide full coverage. This is where the Shield and LeapXpert partnership comes into play. LeapXpert offers compliant, governed and secure communications on messaging and voice channels, while Shield offers multi-layered AI surveillance to manage and mitigate communications compliance risks.”
“The surge in demand for comprehensive compliance solutions in 2023 reflects a clear realisation among financial institutions that closing compliance gaps is imperative,” said Avi Pardo, co-founder and CBO at LeapXpert.
“From installing messaging capture solutions to seeking robust governance controls, organisations are now determined to transform all popular messaging apps used by their team members into approved and compliant channels. As regulatory scrutiny intensifies, companies understand the need for decisive action and solutions that help minimise risk by ensuring messaging compliance.”
Conducted in April 2023 by Global Surveyz, the survey examined the challenges financial compliance departments face in:
- Capturing and surveilling unmonitored communication channels
- The effectiveness of banning these communications
- Which channels are the most concerning
- Financial organisations’ plans to regulate employees.
The survey polled 200 finserv professionals, 100 in the US and Europe each.