Chatrooms in Finance: What’s all the Fuss About?


Wrestling with Regulations

computer security 2There are few industries in which real-time chat is as important as in finance – and ironically enough, few industries in which it’s so challenging to implement.

In the wake of 2008’s global financial crises, regulatory bodies have been wrestling with how best to keep checks and balances in place. It’s not an easy ask: on one hand, it’s fraught with political baggage, on the other, it’s hard to ensure rules stay relevant when communication technology is changing so rapidly.

Nonetheless, the United States government has been flirting with amendments to the Dodd-Frank Act, changes largely designed to assist small banks and credit unions. In addition, the Volcker Rule – a provision to Dodd-Frank that limits proprietary trading – comes fully into effect this month.

As for the businesses in this sector, they’ve got a hard balance to strike, too. Productivity and growth are more important than ever, but so is staying compliant (and avoiding massive fines and bad publicity).

For some FS organizations, the simple answer is to “just say no” to technology that could lead to headaches. And if you’ve caught some of the recent headlines, you’ll know that “headache” is putting it mildly.

In 2014, Forex traders used private chatrooms to plan the manipulation of FX benchmark rates, an act which cost the six banks involved a total of $4.3 billion in fines. In 2013, a major institution was fined $3.75 million for failure to record instant messages, emails, and trading records, while the consequences of that year’s LIBOR scandal – documented through text – still resonate to this day.

Across these blunders, there’s a common theme: The organizations involved didn’t have the systems in place to enable easy, secure, compliant, real-time communication between employees. As a result, those employees turned to third-party platforms to carry out their dealings – unregulated, unsecure, and noncompliant options.

Not only did this make it impossible to properly audit chatroom communications, it also made illegal, under-the-table trading and market manipulation that much easier.

“In [every scandal], there has been a burgeoning honey-pot of funds which have tempted mid-level employees to cut corners dramatically in competitive businesses,” writes Ben W. Heineman Jr. of Harvard Business Review. “For business leaders, the need truly to drive the fundamentals is at its height in such conditions: prevention through risk assessment of vulnerable processes, and effective risk mitigation through education and checks and balances; detection through internal reporting and internal forensic auditing; and early response before the problems metastasize.”

To do this – to nip the finance industry’s chat problem in the bud – institutions need a secure, organization-wide, chat system that can be used across multiple mobile operating systems and managed centrally by IT.

Why Not Ban Chatrooms Altogether?

The decision many banks have settled on – banning group chatrooms altogether – is the wrong one. Because chatrooms are, in fact, the most powerful collaborative tool in any FS organization’s arsenal. With the right approach to security and management, they offer a number of key advantages:

  • Better communication streams: By connecting with one another through group chat, financial professionals can ensure that everyone’s always kept abreast of what’s happening internally. It also becomes significantly easier for staff to reach one another, and their communications are made more efficient as a result. Information exchange is similarly seamless, while collaborative research and discussion can be carried out with ease.
  • Opportunity/revenue generation: The increased productivity, efficiency, and effectiveness of professionals using a mobile-enabled chat system means faster decision-making, fewer missed opportunities and higher revenue. This also translates to considerable cost savings, as less time is wasted as a result of operational inefficiencies. Even if your chat solution only saves each employee ten minutes of time a day, it could still offer savings of over 1% of a company’s salary bill.
  • Compliance: With the right enterprise-class chat platform, FS organizations can ensure that their digital communications are compliant and can be properly monitored, audited, and secured. In addition to avoiding hefty regulatory fines, this allows them to better police employees.

No other mode of communication provides the same benefits. Instant messaging platforms offer a few – quick communication and better coordination – but most fall short where meetings, collaborative research, and cross-platform communication are involved. And while email allows for deep exchange and discussion of ideas, it’s also much slower-paced and prone to ‘reply-all’ overload.

Why FS Organizations Are Choosing MindLink for Compliant Chat

MindlinkBased on the acclaimed Microsoft Lync™ Platform, MindLink is a fully mobile, integrated enterprise chat solution.

You’re thinking: Doesn’t Microsoft Lync Mobile offer group chat out of the box? It does, but it lacks cross-platform mobility, MDM/EMM support, persistent chat capabilities, out-of-the-box compliance, advanced integrations and other key business features.

Securely accessible on tablets and smartphones as well as desktop systems, MindLink allows for better communication between dispersed, cross-functional teams. Persistent messages and a robust search feature make recordkeeping and auditing simple, while MindLink’s capacity to connect with existing architecture and third-party systems allows for a setup process that won’t disrupt workflow.

Perhaps most important, however, is the fact that it’s intuitive without sacrificing security or compliance. Users can enjoy faster decision-making, filtering of critical information, and improved communication without having to worry about any obtuse security measures.

Finance stands to gain the most from persistent group chat. By using an enterprise-grade tool such as MindLink, businesses can tackle the challenging legal environment of the finance sector while at the same time equipping their employees with a powerful tool for communication, coordination, and productivity.

To learn more about MindLink, check out this webinar: No Fear Chat: Secure Chat in Financial Services.

Or give it try for free: MindLink Free 30 Day Trial

About Carrie Cardoso Côté

I am the Senior Marketing Manager for the App Ecosystem team at BlackBerry. I eat, sleep and breathe apps at BlackBerry, and am focused on delivering valuable apps and solutions to our customers while building strong partner relationships. I’m also a wife, mom, enthusiastic foodie, and crafter extraordinaire. And I can bake a mean scone.

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