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Because their employees use WhatsApp, major banks, including UBS and Credit Suisse, have to pay more than $1 billion in fines.
WhatsApp is one of the most popular apps in the world. Billions of people worldwide use the messenger service to stay in touch with friends and acquaintances. Even if there are always concerns regarding data protection, using the app is completely unproblematic for most people. But not if you work for an international financial institution.
Because banks have to meticulously document communication in-house and with business partners, for example to prevent insider trading or to be able to prove compliance with complicated financial market rules. But because countless employees* of big banks used WhatsApp for their business instead of official communication channels, the institutes now have to pay a collective fine of more than one billion dollars.
200 million per bank
Like the Wall Street Journal reported, US authorities are regarding to conclude a settlement with big banks. Affected are Bank of America, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS.
They each have to pay almost $200 million to the US regulators SEC and CFTC. It was announced last month that Credit Suisse had made a provision of $200 million because it also expected a fine of this magnitude.
WhatsApp can automatically delete messages
The authorities’ investigation revealed that the banks used WhatsApp to negotiate details of individual investments or to arrange meetings with customers. WhatsApp usage increased during the early phase of the pandemic, when many bank employees also worked from home.
But with WhatsApp, messages can be easily deleted, and this has even been automated for some time. WhatsApp was also often used on employees’ private devices. Such a practice is inconsistent with modern compliance regulations.
