Report: Messaging channels remain a big threat to bank risk management

The report, released by Shield and LeapXpert, reveals that while virtually all compliance officers surveyed plan to monitor WhatsApp and other messaging apps by the end of 2023, 73% of financial institutions still lack confidence in their ability to enforce bans on mobile communications over unapproved channels.

In September 2023, an SEC probe found that from 2018 to 2021, employees at several prominent banks frequently used off-channel communications to conduct business. Since 2022, USD 2 billion worth of fines have been levied at more than a dozen financial firms.

Despite these threats, multi-million-dollar fines do not occupy the top spot among the concerns of compliance professionals. They come in second place with 34% of respondents selecting them as the top concern. The greatest fear revolves around regulatory audits themselves with a significant 64% ranking them as their primary concern. Internal audits follow behind at 32%, while concerns about reputation damage stand at 28%, and losing business data at 27%.

Other survey findings

According to the findings, WhatsApp is being monitored by 57% of companies in the US, whereas only 44% of their EU counterparts engage in such monitoring. The survey respondents anticipate a shift in mobile device policy, with the percentage of companies providing corporate devices projected to increase from the current 53% to 66% within 18 months.

Currently, only an average of 29% of respondents reported monitoring WhatsApp, SMS, iMessage, LINE, WeChat, Telegram, and Signal. However, this figure is expected to significantly rise to an average of 90% by the end of 2023.

Officials from Shield said that their collaboration with LeapXpert addresses the industry's lack of widespread changes despite massive SEC fines. By providing compliant and secure communication solutions, LeapXpert and Shield enable companies to monitor messaging and voice channels effectively, going beyond policy bans. This partnership offers multi-layered AI surveillance and ensures comprehensive coverage for managing and mitigating communication compliance risks.

Also commenting on these development, representatives from LeapXpert said the surge in demand for comprehensive compliance solutions in 2023 reflects a clear realisation among financial institutions that closing compliance gaps is imperative. From installing messaging capture solutions to seeking robust governance controls, organisations are now determined to transform all popular messaging apps used by their team members into approved and compliant channels. As regulatory scrutiny intensifies, companies understand the need for decisive action and solutions that help minimise risk by ensuring messaging compliance.

How has the report been conducted?

Conducted in April 2023 by Global Surveyz, the survey examined the challenges financial compliance departments face in capturing and surveilling unmonitored communication channels, the effectiveness of banning these communications, which channels are the most concerning, and financial organisations’ plans to regulate employees. The survey polled 200 finserv professionals, 100 in the US and Europe each.