Big brother is watching you! Orwellian approach to the use of instant messaging by traders gains ground

Intrusiveness in the workplace has become a moot point recently, especially at a time at which companies are more keen than ever to promote free thought among employees to gain maximum results, a total contrast to the Orwellian business environment of 20 years ago.

The use of instant messaging among traders has become so widespread that the cost of an enterprise subscription to Bloomberg Messenger and similar commercial messaging systems for the financial services industry runs into the tens of thousands.

In the aftermath of the high profile FX benchmark manipulation cases which were brought against six major global banks last year, resulting in a collective regulatory fine of over $4.3 billion and a further several billion dollars in class action litigation cases on both sides of the Atlantic, regulators and bank officials have begun to clamp down on the use of messaging services between traders, as these internal systems were used by employees of the banks whose employees manipulated FX benchmarks, for exactly the purpose of divulging confidential information to eachother.

For companies seeking high-speed business communication, telephone can be too slow and even email can start to become cumbersome. By comparison, instant messaging is considered more productive because it encourages people to be brief and enables multitasking.

“The business use of instant messagin is currently growing at a much faster pace than the use of IM by consumers,” reads a recent report from the Radicati Group, a California-based technology market research firm.

“This is due to the fact that the use of messaging systems in the workplace can be tightly monitored and controlled by IT and users are expected to use it much in the same way they use email.”

There are of course risks, such as the release of confidential information or other inappropriate activities.

Recent investigations into currency market manipulation have put a spotlight on the misuse of IM communication. In November last year, when banks began to settle the regulatory fines for benchmark manipulation but had yet to face the gravity of civil law suits, a corporate clampdown on the use of messaging came into play.

The investigation revealed a number of incriminating messages sent between traders using instant messaging systems to request trades. In one example, a manager at the bank asked a Deutsche submitter, “Could I beg you for a low 3m (Euribor) fixing today please… that would be the best xmas present ;),” according to the Financial Conduct Authority. The response:”Be a pleasure, no probs.”

Other banks have also been fined for similar types of activity revealed in instant messenger conversations, which has led to a number of regulatory reforms and forced institutions across various sectors to review their electronic communication systems and put in place monitoring systems.

Yvette Jackson, global head of collaboration and community services at Thomson Reuters, said the investigations revealed a number of problems with IM communication in the workplace, including the use of a number of disparate messaging systems and a lack of software and support to manage them.