A report by Shield and LeapXpert finds that financial institutions face ongoing challenges in monitoring employee messaging apps.
Shield, a provider of compliance solutions, and LeapXpert, a pioneer in responsible corporate communication, found that only half of financial institutions (51%) are keeping an eye on employee WhatsApp conversations. Even fewer organizations record messages sent over iMessage, LINE, WeChat, Telegram, and Signal.
According to the report, 73% of financial institutions still lack confidence in their capacity to impose restrictions on mobile communications using unapproved channels, even though the vast majority of compliance officers surveyed planned to monitor WhatsApp and other messaging apps by the end of 2023. Despite severe fines imposed by US regulators for failing to restrict employees’ use of messaging apps on their mobile devices, this persists.
In September of last year, an SEC investigation revealed that from 2018 to 2021, staff members at numerous prestigious banks often used off-channel conversations for business purposes. More than a dozen financial institutions have been hit with fines totaling $2 billion over the past 18 months.
Surprisingly, compliance professionals’ main concerns are not multimillion-dollar fines. They are the primary concern for 34% of respondents, placing them in second position. Regulatory audits themselves are the subject of the greatest worry, according to a considerable 64 percent of respondents. Concerns about reputational harm come in second at 32%, followed by internal audits at 32% and company data loss at 27%.
Additional survey results:
As of right now, 57% of US businesses are keeping an eye on WhatsApp, compared to 44% of their EU counterparts.
In 18 months, respondents predict that the percentage of companies issuing corporate devices would increase from the current 53% to 66%.
Currently, only an average of 29% of respondents reported monitoring WhatsApp, SMS, iMessage, LINE, WeChat, Telegram, and Signal; however, by the end of 2023, this percentage is expected to soar to an average of 90%.
Reducing the risks of communications compliance
According to Eran Noam, co-founder of Shield and its chief business officer, “when the significant SEC fines were issued, it seemed imminent that widespread changes would take place across the industry.” “Our report demonstrates that this did not occur. Although there are legitimate difficulties with data collection, monitoring, and user experience, regulations for banning are not well-liked.
Technology allows businesses to monitor these channels rather than enacting policy bans, which don’t cover everything. This is where the alliance between Shield and LeapXpert is useful. Shield offers multi-layered AI surveillance to monitor and minimize communications compliance issues, whereas LeapXpert offers compliant, controlled, and secure communications on message and phone channels.
According to Avi Pardo, co-founder and CBO at LeapXpert, “the surge in demand for comprehensive compliance solutions in 2023 reflects a clear realization among financial institutions that closing compliance gaps is imperative.”
“Organisations are now keen to convert all popular messaging apps used by their team members into approved and compliant channels, from implementing messaging capture solutions to establishing rigorous governance measures. Companies are aware of the necessity for prompt action and solutions that reduce risk by assuring messaging compliance as regulatory scrutiny increases.
The survey, which was carried out in April 2023 by Global Surveyz, looked at the difficulties financial compliance departments encounter in:
- Surveillance and recording of unrestricted communication routes
- How well it works to prevent these communications
- What television shows are the most alarming?
- Plans by financial institutions to control personnel.
200 finance professionals were surveyed, 100 of whom were from the US and 100 from Europe.