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Over 50% of firms don’t believe their communications are compliant

SecurityWeek recently reported on the Electronic Communications Compliance Survey which surveyed over 100 financial services individuals. The results are, as expected, showing how challenging it is for financial institutions to manage and ensure full compliance for a multitude of communication channels. Indeed, over 50% of firms are concerned about their compliance on non e-mail communication channels. This combined with 47% of firms being examined in the past year (up from 27% in 2015) tells a powerful story for the need of compliant and secure communication channels. Long gone are the days where archiving your e-mail messages was enough. Organizations now need to keep track of many sources of messages with many of them being sent through external networks such as social media, public instant messaging, text messages, etc. Multiple solutions can be considered to tackle these issues, but a great place to start is by centralizing and offering a best in class chat platform to your employees and clients. This reduces the number of channels not being controlled, improves compliance and enhance both staff and client engagement.

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Wall Street’s New Favorite Way to Swap Secrets Is Against the Rules

Dirty jokes and NSFW GIFs. Snaps of unsuspecting colleagues on the trading floor. Screenshots of confidential client positions.

All that — and, on occasion, even legally dubious information — is increasingly being trafficked over the new private lines of Wall Street: encrypted messaging services like WhatsApp and Signal.

From traders to bankers and money managers, just about everyone in finance is embracing these apps as an easy, and virtually untraceable, way to circumvent compliance, get around the HR police and keep bosses in the dark. And it’s happening despite the industry’s efforts to crack down on unmonitored communications, according to conversations with employees at more than a dozen of Wall Street’s most recognizable firms.

Just this week, a former Jefferies Group banker was fined in the U.K. for sharing confidential data on WhatsApp.

In many ways, the development reflects a cultural shift. At big banks and small shops alike, rowdy trading desks and the boys-will-be-boys ethos are no longer tolerated, at least publicly. But the widespread use of encrypted apps is also raising a deeper concern: It could enable reckless behavior that’s all but impossible to police and lead to abuses like the chat-room scandals involving Libor manipulation and currency rigging.

“You’re really able to operate outside of the bank,” said William McGovern, a former SEC branch chief and senior lawyer at Morgan Stanley who now works at law firm Kobre & Kim. “We have seen in our investigations that the ground is shifting under everyone, and technology changes are driving a lot of it.

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