# Asset managers on alert after ‘WhatsApp’ crackdown on banks
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-18
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Asset Managers Crack Down on Personal Communications Tools
Meta Description: Asset managers, like banks, are cracking down on the use of personal communication tools like WhatsApp to ensure compliance with regulations when conducting
URL: https://financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-bankshtml

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By Iain Withers and Sinead Cruise

LONDON (Reuters) – Asset managers are tightening controls on personal communication tools such as WhatsApp as they join banks in trying to ensure employees play by the rules when they do business with clients remotely.

Regulators had already begun to clamp down on the use of unauthorised messaging tools to discuss potentially market-moving matters, but the issue gathered urgency when the pandemic forced more finance staff to work from home in 2020.

Most of the [companies caught in communications](https://www.financedigest.com/key-ingredients-to-formulate-and-communicate-a-successful-company-ethos.html "Key ingredients to formulate and communicate a successful company ethos") and record-keeping probes by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been [banks – which have collectively been fined or have set aside more than $1 billion to cover regulatory](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") penalties.

But fund [firms with billions of dollars](https://www.financedigest.com/dollar-stands-firm-while-traders-await-cpi.html "Dollar stands firm while traders await CPI") in assets are also increasing their scrutiny of how staff and clients interact.

It is the hottest topic in the industry right now,” said one deals banker, describing the use of [personal communications](https://www.financedigest.com/51-of-brits-support-teresa-may-and-would-grant-access-to-their-personal-communication-and-internet-browsing-history-as-part-of-the-snoopers-charter.html "51%* of Brits support Teresa May and would grant access to their personal communication and internet browsing history as part of the Snooper’s Charter ") channels across the broader financial industry. The banker declined to be named in keeping with his employer’s rules on speaking to the media.

Reuters reported last year the SEC was looking into whether Wall Street banks had adequately documented employees’ work-related communications, and JPMorgan was [fined $200 million in December for “widespread” failures](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure").

German asset [manager DWS said last month it had set aside 12 million](https://www.financedigest.com/exclusive-crypto-giant-binance-moved-400-million-from-u-s-partner-to-firm-managed-by-ceo-zhao.html "Exclusive-Crypto giant Binance moved 0 million from U.S. partner to firm managed by CEO Zhao") euros ($12 million) to cover potential U.S. fines linked to investigations into its employees’ use of unapproved devices and record-keeping requirements, joining a host of banks making similar provisions, including Bank of America, Morgan Stanley and [Credit Suisse](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout").

Sources at several other investment firms – described in the financial community as the ‘buy-side’ – including Amundi, AXA Investment [Management](https://www.financedigest.com/french-watchdog-fines-h2o-asset-management-executives-over-tennor-investments.html "French watchdog fines H2O Asset Management, executives over Tennor investments"), BNP Paribas Asset Management and JPMorgan Asset Management, told Reuters they have deployed tools to keep all communications between staff and clients compliant.

Spokespeople for the SEC and CFTC declined to comment on whether their investigations could extend beyond the banks, but industry [sources](https://www.financedigest.com/german-new-passenger-car-registrations-up-3-in-august-industry-source.html "German new passenger car registrations up 3% in August – industry source") expect authorities to cast their nets wider across the finance industry and even into government.

Last month Britain’s Information Commissioner’s Office (ICO), the country’s top [data protection watchdog, called for a review of the use of WhatsApp, private emails and other messaging apps by government officials after an investigation found “inadequate data security”](https://www.financedigest.com/how-finance-firms-can-unify-two-data-approaches-to-improve-both-compliance-and-security.html "How finance firms can unify two data approaches to improve both compliance and security") during the pandemic.

GOOD BUSINESS FOR SOME

Regulations governing financial institutions have progressively been tightened since the [global financial crisis of 2007-9 and companies have long recorded staff communications to and from office](https://www.financedigest.com/black-panther-sequel-ignites-box-office-with-330-million-global-debut.html "‘Black Panther’ sequel ignites box office with 0 million global debut") phones.

This practice is designed to deter and uncover infringements such as insider trading and “front-running,” or trading on information that is not yet public, as well as [ensuring best practice](https://www.financedigest.com/three-steps-to-ensure-best-practice-in-your-ico.html "Three steps to ensure best practice in your ICO") in terms of treatment of customers.

But with thousands of finance [workers and their clientele still working](https://www.financedigest.com/1-in-5-uk-workers-believe-there-is-a-gender-divide-with-work-uniforms.html " 1 in 5 UK workers believe there is a gender divide with work uniforms") remotely after decamping from company offices at the start of the pandemic, some sensitive conversations that should be recorded remain at risk of being inadvertently held over informal or unauthorised channels.

Brad Levy, CEO of business messaging software firm Symphony, said concerns on [managing that risk](https://www.financedigest.com/strategies-banks-use-to-manage-liquidity-risk.html "Strategies Banks Use to Manage Liquidity Risk") had driven a surge in interest for software upgrades that make conversations on popular messenging tools including Meta Platforms’ WhatsApp recordable.

“Most believe the breadth of these investigations will go wider as they go deeper,” Levy said.

Many [markets participants](https://www.financedigest.com/organic-fertilizer-market-where-should-participant-focus-to-gain-maximum-roi-exclusive-report-by-future-market-insights.html "Organic Fertilizer Market | Where Should Participant Focus To Gain Maximum ROI | Exclusive Report By Future Market Insights") have retention and surveillance requirements so are likely to take a view, including being more proactive without being a direct target.

He said Symphony’s user base has more than doubled since the pandemic to 600,000, spanning 1,000 financial institutions including [JPMorgan and Goldman](https://www.financedigest.com/jpmorgan-bofa-cautious-on-job-cuts-as-goldman-layoffs-loom.html "JPMorgan, BofA cautious on job cuts as Goldman layoffs loom") Sachs.

Symphony peer Movius also said its business lines specialising in making WhatsApp and other tools recordable have more than doubled in size in the space of a year, with sales to [asset managers](https://www.financedigest.com/britains-post-brexit-asset-management-revamp-eyes-liquidity-tokenisation.html "Britain’s post-Brexit asset management revamp eyes liquidity, tokenisation") a growing component.

Many on the buy-side have recognised that you can’t just rely on SMS and voice calls,” said Movius Chief Executive Ananth Siva, adding that the company was also seeking to work with other highly-regulated [industries including](https://www.financedigest.com/chemical-process-mixers-industry-2021-includes-the-major-application-segments-and-size-in-the-global-market-to-2028.html "Chemical Process Mixers Industry 2021 Includes The Major Application Segments And Size In The Global Market To 2028") healthcare.

Movius software integrates third-party communications tools such as email, Zoom, Microsoft Teams and WhatsApp into one [system that can be recorded](https://www.financedigest.com/market-for-tire-pressure-monitoring-systems-market-to-record-significant-incremental-dollar-opportunity-through-2026.html "Market for Tire Pressure Monitoring Systems Market to Record Significant Incremental Dollar Opportunity Through 2026") and archived as required, he said.

Amundi, AXA IM, BNPP AM and JPMorgan [Asset Management](https://www.financedigest.com/fineco-ceo-expects-fixed-income-demand-to-help-managed-assets.html "Fineco CEO expects fixed income demand to help managed assets") all confirmed they had adopted Symphony software but declined to comment on the full breadth of services they used or when these had been rolled out.

Amundi and AXA IM both confirmed they used Symphony services for team communications, while AXA IM also said they used it for [market information](https://www.financedigest.com/golf-apparel-market-key-players-and-production-information-analysis-with-forecast-2031.html "Golf Apparel Market: Key Players and Production Information Analysis with Forecast 2031").

Amundi, BNPP AM and JP Morgan AM declined to comment on whether they thought regulators would seek to investigate record keeping at asset [managers after enforcement actions against the banks](https://www.financedigest.com/how-effective-talent-management-could-disrupt-the-retail-banking-sector.html "HOW EFFECTIVE TALENT MANAGEMENT COULD DISRUPT THE RETAIL BANKING SECTOR") were completed.

A spokesperson for BNPP AM said it had banned the use of WhatsApp for client communications due to compliance, legal and [risk considerations including General Data](https://www.financedigest.com/driving-returns-and-reducing-risk-with-data.html "Driving returns and reducing risk with data") Protection Regulation (GDPR).

($1 = 0.9872 euros)

(Additional reporting by Pamela Barbaglia; editing by Barbara Lewis)


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