Banking staff using Messaging Apps – what’s the problem?

compliance, banking, messaging apps

In October 2020, two senior executives at Morgan Stanley left the business after their use of consumer messaging applications resulted in an accusation of a compliance breach.

This is not the first issue caused by an unauthorized use of a consumer messaging application like WhatsApp or WeChat this year. In January 2020, a JP Morgan credit trader was suspended for using a group WhatsApp to communicate with colleagues. The problem isn’t a new one for banks. Deutsche Bank suspended a interest-rate trader in 2016 for asking a counterparty to join a WhatsApp group chat used to discuss interest rates. 

Why are banks against messaging? 

While mobile phones are banned on trading floors, the exponential rise of messenger applications poses a headache for banks. Conversations on messaging apps like WhatsApp and WeChat, are encrypted, but are not considered safe from a compliance point of view. Interactions can be deleted and phones lost. If an employee leaves, the company-side record of the conversation leaves with the employee. Given increasing regulation, governance and monitoring across the whole financial industry, it is no wonder that often banks simply ban these apps.

Most banks had already embarked on some level of Digital Transformation program but Covid-19 has accelerated the need. Companies are trying diverse ways to reach out and remote manage customer relationships. The banking industry is in a conundrum. How can they reach customers through the apps that they use? While at the same time ensure that these conversations sit within the walls of the bank? Keeping conversations visible to governance, regulatory control and integrated with other business-critical applications ?

How can banks digitally embrace messaging apps?

That is what LeapXpert currently delivers to three out of the ten top banks worldwide. Conversations stay within a bank’s control, as LeapXpert’s Federated Messaging Orchestration Platform (FMOP) retains the entire conversation . Employees use LeapXpert to message a client via the messaging apps the client prefers. All sides of the conversation are retained and nothing can be deleted. A bank has a complete view of the interaction. Even if someone deletes a message or the phone or employee are not longer available.

The information in the conversation can be mined using AI and analytics programs. This opens opportunities to provide better experiences to customers. Plus, all the information can be audited for compliance purposes. Limits and permissions can be placed on who can send what information types to whom. If the bank doesn’t want an individual to be able send a voice note or a PDF, then they can’t.

Messaging apps will not go away and in a socially distant world, the ability to communicate easily with customers is increasingly important. Banning their use clearly is not working, so the key is to find a way to navigate this world while maintaining control.

Talk to an expert at LeapXpert to find out how we can help you embrace messaging applications for your organization today.

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