By Charlie Conchie
The ‘work phone’ could be set for a revival in the City this year as top firms snap up tens of thousands of mobiles to stamp out wayward Whatsapp use by staff, a compliance boss has predicted.
Regulators on both sides of the Atlantic have been on the offensive against the misuse of private messaging apps in recent years, with both the Financial Conduct Authority and Securities and Exchange Commission warning firms and dishing out fines to companies.
The SEC fined 16 banks a total of $1.8bn at the end of 2022 – including Barclays, Citigroup, Goldman Sachs and Morgan Stanley – after staff were found to have discussed deals on private apps, prompting the FCA to start quizzing some regulated firms in the UK.
A top compliance chief says the heightened pressure from watchdogs was leading firms to begin buying up mobiles en masse to more actively monitor employees’ communication.
“We saw a big shift to bring your own devices – BYOD – a few years back, where individuals would change from a company provided iPhone, for example, to ‘own the device, manage the device and your responsibility’,” Paul Hurst, principal regulatory advisor at tech firm Smarsh, told the Following the Rules Podcast.
“That is shifting back again because of the fines that we saw a couple of years back. It [isn’t] just the one company. We are talking about the majority of companies, – probably (only) one out of 10 that I’ve spoken to are not shifting back [to work mobiles].”
Firms were potentially set to buy “20,000 phones or 50,000 phones” at a time to roll them out to their employees, he added.
“It’s an expensive endeavour, but it’s far cheaper than paying billion dollar fines,” Hurst said.
Regulators in the past have levied hefty fines on individuals as well for communicating on their own devices. In 2017, the FCA fined Christopher Niehaus, a former investment banker, £37,198 for sharing client confidential information over WhatsApp.
After the SEC fined banks at the end of 2022, a spokesperson for the regulator told City A.M. : “We are actively discussing personal device use with a range of UK authorised firms, not limited to those who may have been subjected to other regulatory enquiries,” a spokesperson said at the time.
Deutsche Bank, Citigroup, JP Morgan and Nomura were among the firms to have been hit with information requests by the watchdog over the frequency and content of staff exchanges through texting and messaging, Bloomberg reported at the time.
