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DO MESSAGING APPS PUT THE FINANCIAL SERVICES INDUSTRY AT RISK?

Ashley Friedlein, founder and CEO, Guild

 

Accelerated by the coronavirus pandemic, the use of messaging apps for professional communications has skyrocketed in recent months. Messaging apps have provided a lifeline to organisations, enabling them to support a remote workforce. However, consumer messaging apps have also seen an increase in adoption, and many will be using them for business, as well as personal use.

When using messaging apps in highly-regulated environments, organisations need to be aware of compliance issues in a financial regulatory capacity, while also adhering to laws relating to security, transparency, and data privacy, such as the General Data Protection Regulation (GDPR).

Not doing so puts banks and other regulated entities within financial services at risk of non-compliance, which can result in serious penalties.

In 2017, the UK’s Financial Conduct Authority (FCA) highlighted the risks of using WhatsApp. Guidance from the Securities and Exchange Commission (SEC) followed in December 2018 outlining its responsibility for monitoring electronic messaging, which included messaging apps.

Although regulators have been clear about the risks associated with using instant messaging apps, some financial firms seemingly failed to develop and implement robust guidelines around the use of these services for professional purposes.

Ashley Friedlein

Earlier this year, a senior credit trader at JP Morgan was suspended for communicating with colleagues via WhatsApp, with Jefferies, KPMG, and VTB Capital also finding themselves subject to investigations after employees were found to be using messaging apps as unofficial channels for communication.

Deutsche Bank took steps to ban all text messaging and communication apps to improve its compliance standards, with many others, including HSBC, Citi, and Wells Fargo following suit to move to a secure communications platform. However, while the financial industry is taking steps to prevent the usage of consumer messaging apps, some firms are failing despite the implications of not having a robust policy around the tools used to communicate within a bank or other regulated entity.

 

Data privacy and security

Data privacy laws such as the GDPR and CCPA make the use of consumer messaging apps in the workplace challenging for IT, HR, corporate governance and compliance teams. The financial and reputational cost of misuse in these ‘shadow communications’ channels can be significant.

WhatsApp, one of the most widely used consumer messaging apps, can result in organisations using the platform being non-compliant with the GDPR privacy regulation due to:

  • Lack of explicit consent – anyone can be added to a WhatsApp group without explicit consent. WhatsApp has added functionality to prevent specific users from doing this, but this is not enabled by default. Contacts can also upload data to WhatsApp/Facebook if they give access to their contacts/address book, even though those contacts have not given consent.
  • Lack of ability to delete information – after a certain time, content posted to WhatsApp cannot be removed.
  • Lack of ability to get your own data back (SAR – Subject Access Request) – WhatsApp cannot provide an individual with messages they have posted, only profile info.
  • Data being transferred outside the EU – it is not very clear where exactly WhatsApp/Facebook moves the data it collects.

The use of WhatsApp for business purposes potentially breaches GDPR in several ways.

Companies do not even know what groups exist in consumer messaging apps, let alone who is in them, or whether former employees or contractors may still have access, increasing the risk of data breaches and leakage of confidential information.

 

A lack of oversight and transparency
Consumer messaging apps like WhatsApp, Signal and Telegram have provided unofficial communication channels that are difficult to monitor, resulting in a total lack of visibility for employers and regulators alike.

Access to these unofficial communication channels presents a serious risk by creating opportunities for employees to take advantage of situations This includes conducting business under the radar in a way that benefits them, or their clients in a manner that is immoral, or even illegal. In some cases, sharing information about clients without intending to cause harm can still result in serious consequences.

Firms have a legal obligation to keep a record of conversations between themselves and their employees, clients, or stakeholders. If legal challenges arise, it may be necessary to provide a record of these conversations. Many consumer messaging apps store data locally rather than centrally in the cloud, making it more difficult to provide a complete record of conversations.

In addition, there are also legal obligations and a duty of care to protect employees and ensure adequate levels of oversight, governance and control. This includes protecting them from bullying, harassment, or inappropriate behaviours in the workplace. The lack of visibility and transparency around consumer messaging apps, including the ability to delete messages, makes it more difficult for HR departments and legal teams to address issues promptly, while inhibiting their ability to collect evidence.

Terms of service

WhatsApp is used by over 40% of UK workers for professional purposes. This appears to violate WhatsApp’s own terms of service, as the app is not intended for business use.

WhatsApp’s terms state:

“WhatsApp is committed to using the resources at its disposal–including legal action–to prevent abuse that violates our Terms of Service, such as automated or bulk messaging, or non-personal use.

“We make no representations or warranties that our Business Services meet the needs of entities regulated by laws and regulations with heightened confidentiality requirements for personal data, such as healthcare, financial, or legal services entities.”

 

How can the financial service industry minimise risk when using messaging services?

The financial services industry requires a tailored approach to messaging in order to effectively minimise risk. Messaging apps are becoming increasingly ubiquitous, and do provide many benefits, such as increased productivity and collaboration. Excluding them from communications completely can close off channels that improve operational efficiency and build rapport between teams – something that has become even more important now that many employees are working from home.

Banks who have taken steps to ban all text messages and communication apps on work-issued devices in order to improve its compliance standards have sought alternatives, such as Symphony – a messaging service aimed at highly regulated financial firms. This enables banks to continue to communicate with clients in real time, while also maintaining thorough and rigorous standards of data security and privacy protection.

Security, transparency, and compliance are paramount in the financial services industry, yet it is easy for unregulated consumer messaging apps to go completely unnoticed. The sector must do more to acknowledge and address their use in order to adhere to these three fundamental principles.

Workplaces, working practises, and channels of communications have needed to change rapidly as a result of the COVID-19 pandemic. It’s critical that organisations address the issues and risks associated with messaging apps by implementing robust policies around workplace communication and seek out viable, compliant alternatives not only now, but as part of a long-term solution.

 

Written by Guild founder and CEO, Ashley Friedlein. Guild is a British, independent and ad-free messaging platform for professional groups, networks and communities.

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Business

BOUNCING BACK IN 2021: DIGITAL TRANSFORMATION IS NO LONGER A CHOICE AS DEPENDENCE ON 5G, IOT AND DATA INCREASES IN SOCIETY AND BUSINESS

Ivan Ericsson, Head of Quality Management, Expleo Group Limited

 

The global pandemic has put enormous strain on businesses and brought into sharp focus the importance of being agile, adaptable and able to increase the pace of innovation and change at short notice – catapulting technology right to the top of the agenda for many organisations.

As the economy works to get back on its feet, technology is only going to play a bigger role in our lives. At Expleo, as experts in digital transformation and the reliable implementation of technological innovations, we’ve outlined the biggest tech-driven trends that we expect to see in 2021 and beyond.

 

1)     “Digital transformation” no longer a choice

If the COVID-19 pandemic has taught businesses anything, it’s that they need to be poised to respond to abrupt market disruption at any moment, making digital transformation mandatory overnight.

With no room for delay, hugely complex corporations – that have historically been slow to adopt technology – have had to accelerate their reliance on technology just to keep afloat in recent months. Digital change, at speed, has become the norm.

Even last year, the idea of an unscheduled video conference call might put people on edge – now most of us wouldn’t think twice about calling a colleague over Teams or Zoom even for a 2-minute conversation. At the same time, social infrastructure has moved with the needs of its users, with telecoms giants strengthening and opening up networks so we can keep communicating despite social distancing.

There are now very few excuses left for operating in a non-digital way. All businesses need to be intelligent businesses that can change direction nimbly, with speed, confidence and composure. As we see more businesses putting this into practice, it’ll likely result in an increased number embracing and normalising some of the behaviours of tech-savvy giants like Apple and Amazon, who have no doubt thrived during this period.

Their success can largely be attributed to normalising an agile approach. By ensuring all applications have testing facilities built in – a “quality shadow” if you will – it allows for continuous improvements, and the ability to change direction quickly and confidently, when needed. This is particularly valuable today as the world becomes more fast-paced and increasingly unpredictable.

 

2)     Big data/AI/predictive analytics 

We’re moving into a space where big data can be extracted from the most seemingly innocuous places. In a hyper-connected world, a move as simple as a dog walk could offer huge swathes of data to the right companies. Many businesses already realise the benefits of capturing and utilising big data, but not all have taken advantage of it. The businesses that move quickest are most likely to reap the rewards in a more impactful way than their ‘data shy’ competitors. Where data used to be a side effect of business operation, it is now the driving force.

As businesses begin to rely more heavily on data to make critical decisions, independent assurance becomes increasingly important to get those decisions right. Forward-thinking, data-driven organisations must therefore assure that the data is correct in the first place, to avoid giving businesses false confidence and risk them moving in the wrong direction – something that is rarely affordable in today’s competitive and fast-paced environment. If businesses are not 100% confident in assuring the quality and accuracy of their own data, they should look to a third party for support.

A key data trend we expect to see moving further into 2021 is the increased use of predictive analytics. At the moment, businesses will often use data analytics to give us insights into our past activities, or to tell us where we are right now. However, the real value lies in knowing where we are going and how we are going to get there. Data analytics will help to identify the optional levels that can be pulled to drive change and realise business benefit.

Secondly, as intuitive technology advances and becomes more accessible, we expect over the next 12 months to see companies of all sizes begin to adopt artificial intelligence (AI) to drive intelligent analytics. In this context, AI refers to various technologies that allow machines to learn, sifting through ‘messy’ big data in order to find and unlock valuable predictive insights into future events. This allows businesses to better adapt their strategy to likely future outcomes and get a head start in the market.

However, with this ever-increasing emphasis on data and data protection, ethical AI will have a more prominent role to play in 2021 and beyond. Protected, usable Data is a by-product of good data security and privacy measures; however, the public remain wary of how their data is being used, particularly after the fallout from Cambridge Analytica’s use of data to influence an election[1]. Businesses, therefore, must give their customers confidence that their data is secure and protected.

 

3)     Moral relevance/corporate altruism

Research shows that young people are increasingly researching and considering the ethics of brands they’re purchasing from. And it won’t be long before this attitude starts seeping into every other aspect of their lives, with more and more people wanting to work for what they consider to be “purpose-driven” businesses.

Talent is the lifeblood of any company, so for big corporations, many of whom were born to create profit, this could put them in a tricky position. They might already be influencing society in a positive way – but this is unlikely to have ever been their main goal.

Moving forward, however, all organisations will have to start thinking about the “Triple Bottom Line”. That means considering the environmental and social impact of your business, alongside your commercial imperative.

We’ll soon see a mindset switch across businesses, from ‘competing’ to ‘advancing’. Instead of wanting to be the “best,” the question will be, how can I better serve the world around me?

In line with this, businesses will have to start thinking more about how to use tech for good, as we’ve seen with the likes of Microsoft Teams connecting tens of millions of people every day, during this very dark time[2].

2021 is likely to bring even more inroads when it comes to using technology to improve society, whether it’s developing bespoke problem-solving technologies or using IT to ‘eco-proof’ existing sectors, the goal for businesses is to rise to this challenge and build a better future for people and the planet through the use of technology. But all organisations will continue to need to be able to justify technology use and prove that they’re using it ethically, and in a secure manner.

 

4)     5G new networks – just about all big trends are driven by/reliant upon faster networks – particularly relevant for a more distributed workforce 

Greater access and utilisation of 5G networks across the country will underpin and accelerate all of the key trends discussed. Everything we do on our smart devices we can expect to do at higher speed, greater capacity and with lower lag times.

As our digital footprints extend beyond simple web browsing and into our daily lives through smart technology, we are creating huge amounts of data every minute. This vast flow of data is increasingly dependent on new high bandwidth networks to facilitate it. Therefore, the merging of technology and engineering will become critical in ensuring big data is carried successfully to drive analytics and drive business.

The fact we have managed to successfully work from home during COVID is a glowing recommendation for the quality of the networks as they exist today, and they will only get better.

The telecoms industry is already working overtime to ensure that people all over the country get reliable access to the internet – and the fact that there is still inequality in this area proves just how challenging this is. But, in line with this trend toward hyper automation, which will make data extraction and analysis a part of everyday life for businesses, the consolidation of tech and engineering will be ever more important.

Forward-thinking companies will look to incorporate 5G networks into their business strategy. This could be from an internal perspective to enhance the abilities of their remote workforce. Alternatively, this could relate to their own products or offerings – developing an internet of things (IoT) strategy, improve user experience, or bring products to market faster by analysing big data and adapting quicker. Either way, with increasingly improved networks, businesses are expected to take advantage of the huge increase in accessible and usable data.

 

Concluding comments:

For businesses to truly reap the benefits of these new technologies, they must be developed and adopted in the right way.

Quality assurance, trust and security are three key requirements that the technology of the future depends on to succeed. Having these requirements at the heart of any digital transformation will ensure that systems perform reliably, having been tested and assured.

By prioritising a seamless customer experience combined with an ability to create, test, and scale digital solutions and operationalise at pace, businesses will be in the best possible position to take advantage of the potential being unlocked by these new technologies.

 

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Business

THE FUTURE OF SAVVY TECH PURCHASES IS KNOWING WHEN TO BUY

There’s no mistaking the impact technology has had in our lives. Once a novelty, technology has now infiltrated every aspect of modern society, and technological advances continue to bring new dimensions to modern living. Yet for all the good that technology brings us – and despite the costs associated with production falling year-on-year – purchasing electronics is often a significant investment.

According to new research by Carphone Warehouse, the average price of electronics in the last year is just shy of £500 at £497.70. Consumers looking to make savvy savings on big tech purchases must both understand what the industry average is for the product category they’re interested in, and learn when prices will be lowest so they can make the purchase at the right time. The electronics retailer outlined the following tips for consumers looking to take stock of technology prices.

 

  1. Know what the average price is, so you can spot the biggest savings

The first step to being able to haggle a better price is knowing what benchmarks to look out for. While you can choose to go under or over the average price – high-end models are often priced significantly higher than average, after all – it can still be useful to know what to compare prices against. The average smartphone currently retails at £527.60, laptops at £680, TVs at £712.31 and digital cameras at £782.60.

As mentioned, there are significant differences between the price of budget and top-end items. For example, while you could get a budget phone such as the Nokia 1.3 for just £65, an Apple iPhone 11 Pro Max could set you back £1,249. Similarly, while a low-end camera like the Nikon Coolpix B500 costs around £205, the camera behemoth that is the Canon EOS 5D Mark IV clocks in at a whopping £1,700.

 

  1. Before you buy, consider any upcoming sales

Once you’ve figured out what you want and the price you’re willing to pay, it can be tempting to make your purchase immediately – for fear of missing out, if nothing else. However, using the sales to your advantage could result in some nifty savings, while keeping abreast of the consumer retail industry could also help you buy at just the right time. Below is a short rundown of some key dates to keep in mind:

January: The start of the year usually sees retailers clearing their Christmas stock, with smartphones, cameras and TVs offered at sale prices. January is also when the Consumer Electronics Show (CES) is held; an event in which new cameras are often announced. If you spot a gem in the CES crowd, wait a couple of months and you could see last-gen models fall in price.

February: As well as Valentine’s Day sales, February sees the Mobile World Congress (MWC) and the announcement of new Sony releases. This month is also a great time to buy the Google Pixel and other smartphones – again due to their release cycle – as well as nab yourself a bargain camera, TV or laptop.

March-April: Look out for a ton of new releases in the spring months, with Huawei, Samsung and Sony releasing their new smartphones, and LG, Samsung, Sony and Panasonic announcing their new TV ranges.

July, August, September: The summer months bring back-to-school sales that typically see student essentials at lower prices. You may be able to enjoy a wide range of deals on TVs, laptops, computers and more during this time. Keep in mind that July is also when Intel and AMD announce their new releases. Responsible for many of the processors that make up the backbone of much of our electronic products, Intel and AMD inspire many brands to lower their prices in anticipation of incorporating their new, advanced processors into their product lines.

November-December: Black Friday and Cyber Monday are undoubtedly the biggest sale events in the consumer electronics space, with deals, discounts and flash sales offered across the entire gamut of the tech world. It’s the optimum time to invest in premium brands, including Apple, Samsung and Google.

 

  1. Embrace the pre-order period for additional bonuses

If you’re an early adopter and only the latest innovations will do, you may not be keen on last-gen products. But keeping up to date with the latest gadgets needn’t mean your bank balance has to take a hefty hit. While costs will naturally be higher for new releases, ordering during the pre-order period could mean you’re able to take advantage of bundle deals or other freebie items provided by the retailer to entice uptake. Sign up to notifications on the products you’re interested in, so you’re forewarned and ready for the pre-order period.

 

  1. Learn some insider tips to beat retailers at the price game

As a final point, when it comes to saving on tech-related purchases, it can be handy to understand retailer behaviour. For example, if you’re looking to upgrade your TV at a cutthroat price, aim for the 55” models. As it’s the most popular size, retailers tend to drop prices on these first in their holiday sales.

If you’re buying tablets, waiting until a new model has been released is usually the best time to get the best prices; last-gen iPads are often discounted a couple of months after a new release. Similarly, if Android tablets are your preference, all you have to do is wait a few months for the newest release to start seeing price drops. And if Kindles are your go-to tablet, it’s probably no surprise that Amazon is the best place for bargains, and particularly so on Amazon Prime Day.

There’s vast potential in technology – and consumer electronics are seeing more and more innovations every year. But, as long as retailer behaviour stays fairly consistent, the information above can help you comfortably get the most for your money.

 

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