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business messaging for stockbrokers

Business Messaging Is A Problem for Stockbrokers


Messaging apps are a preferred method of communication for clients to contact stockbrokers. However, being hit with a $5 million fine for not being able to keep client communications when using instant messaging is a hefty price to pay.

Stockbrokers and traders are contactable through messaging apps such as WhatsApp, WeChat, Line or Facebook Messenger because their clients want to use these tools. However, using private instant messaging apps for business communication is a compliance risk and increases the risk for loss of B2C communication data for companies.

Changing technology is leaving the finance industry floundering to remain current in two areas. Firstly, there is a lack of technology used to address security and compliance issues with messaging apps. Secondly, brokering firms aren’t utilizing business messaging services to meet the needs of technologically adept clients who live on instant messaging.

Recording Trades, Buys and Sells

Within the financial industry, keeping record of client communications is a legal requirement in most countries. Messaging apps are a hugely popular way for clients to communicate with stockbrokers and are particularly useful for quick buy and sell orders in a volatile market.

In fact, it has been shown that day-traders using instant messaging apps have fewer financial losses than those that don’t.

However, financial companies often ban communications that cannot be easily captured using desktop capturing software. Despite this, traders, dealers and stockbrokers continue to create a compliance risk by using instant messenger apps for business messaging, because that is how their clients want to communicate.

The lack of a clear communication trail creates a compliance risk which puts the companies financial license and ability to trade in jeopardy. It also makes it hard to ensure accurate record-keeping of a client’s portfolio.

The way to mitigate risk and ensure accurate recording keeping of a client’s portfolio is for companies to use the right business messaging technology. Business tools which allow employees to send messages from a company work app to client’s messengers, rather than using their personal accounts, a Federated Messaging Orchestration Platform (FMOP), such as LeapXpert.

Retaining Data Ownership

When brokers use their personal instant messaging profiles on their personal phones the end-to-end encryption used means that the data is stored exclusively on the broker’s app or the client’s app. There is no business messaging server that the company can access to retrieve data if the broker leaves the company.

While most stockbrokers retain their clients when changing brokerage firms, the record of any trades undertaken in the company’s name needs to be able to be recalled by the company if needed.

Business communication data loss can not only result in decreased trust and lowered reputation of both trader and company but may result in financial loss through government fines or legal action.

Unfortunately, few compliance officers or business managers are aware of the business messaging technology solutions that will enable full data ownership to remain with the company.

One option is to send messages to a client’s WhatsApp or WeChat from a company’s business messaging app, rather than the broker’s personal messaging app. This involves using a FMOP which enables recording of all messaging app conversations and activities so that they are always available to be recalled when needed – without inconveniencing the client or trader.

While the FMOP manages all broker side communication, outgoing communication is received by the client in their preferred secure messaging apps.

Business Messaging: Protecting Client Data

Better use of technology by financial institutions can protect client data and ensure records of business messaging communications between a broker and client are retained by the company, rather than in the broker’s possession. This ensures that the client is always able to access trading information, particularly if they are investing in unlisted stock.

Technological solutions using FMOP allow a trader to communicate with their clients using the client’s preferred messaging app. They also meet compliance requirements for being accessible at any time and to ensure that the company retains ownership of the data. This protects client data, keeping it in a secure and accessible location.

The right FMOP also allows for integrated notes or references to be attached to a message, creating a secure and accurate audit trail that the client is able to access if needed.

Moving Forward with Business Messaging Services

In short, business instant messaging services and apps as a way of communication are here to stay. Stockbrokers and traders will continue to use the technology that their clients use.

Compliance managers need to look for business communication tools that allow brokers to use business messaging apps that are managed by the company rather than using personal accounts. The alternative is to spend their time updating manuals and policies to cater to each new messaging app. While business managers need to look for tools that allow messaging apps to be centrally maintained.

New communication tools will continue to develop, and clients will use them. For stockbrokers wanting to stay ahead, the LeapXpert Federated Messaging Orchestration Platforms is a game-changer. The ultimate goal is to work with staff and clients to have secure business messaging apps and systems that retain all data inhouse.

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