After being fined, banks move to ban Whatsapp – but many worry it won’t work
An increasing number of banks and financial services firms have banned their staff from using encrypted messaging apps such as Whatsapp for work purposes after regulators hit banks with hefty fines for failing to stamp out the practice.
A survey by tech firm Global Relay found that 59 per cent of respondents, which included some of the largest banks in the UK, US and Europe, have banned platforms like Whatsapp and Wechat.
The bans come after a wave of regulatory action against firms that have failed to clamp down on private messaging services.
Chip Jones, executive vice president of Global Relay, said the bans were an attempt by firms to prove they have taken action against private messaging.
“When – and if – the regulator comes knocking, they can clearly show that they have taken action to attempt to mitigate this breach of regulation,” Jones said.
But the survey revealed that only three per cent of firms feel confident that the bans will prove an effective solution to ensure compliant behaviour. Just over a quarter are unsure about their efficacy.
So far, the majority of regulatory action has been taken in the US. The Securities and Exchange Commission (SEC) has handed out $1.8bn worth of fines to 16 lenders including Goldman, Citi, and Morgan Stanley.
Just last week, HSBC was fined $15m (£12m) by the SEC for “widespread and long standing failures” to maintain electronic communications.
Around half of respondents believed the UK would soon follow suit. The Prudential Regulation Authority recently censured Wyelands Bank for wide-ranging failings including “poor retention of Whatsapp messages”.