Financial firms clamp down on unauthorised IM

The days are numbered for users of unauthorised consumer instant messaging (IM) applications within financial securities firms, new research has predicted.

A Web-based survey conducted by Tower Group questioned employees within investment management, banking, broking, dealing and hedge fund firms.

The results suggested that compliance and security concerns will drive consumer IM applications off the desktops of employees associated with trading and trade processing within three years.

Consumer applications are likely to be banned from the desktops at all asset management firms within five years, the survey predicted.

Despite the security and compliance risks associated with instant messaging, 28 percent of survey respondents still use less secure consumer IM applications.

"Although consumer IM applications are unsustainable in the securities environment, TowerGroup views IM as a necessary tool for business communication and believes that asset management firms should treat it as such," said Peter Delano, senior analyst at Tower Group's Investment Management practice.

"Firms will increasingly deploy IM platforms designed for business users in general and securities firms in particular."

The analyst stressed that companies will have to deploy best practices like platform standardisation, message surveillance and storage, ongoing user administration, and defensive software against malicious attacks to manage IM risk.

"But one thing is certain: the asset management industry will not and should not go back to using the telephone and email as the only methods of electronic communication," said Delano.

According to the report, the average IM user in the securities environment sends and receives a small number of messages on a given day.

Three-quarters of survey respondents send 25 or fewer messages per day, while 78 percent of respondents report receiving 25 or fewer instant messages.

Survey respondents in trading and trade-related processing send and receive the highest number of instant messages and, compared to the overall sample, are more likely to converse with external recipients via IM.

"Within the securities industry, Tower Group found that IM is primarily used to communicate within an institution on business-related topics, with the majority of messages sent and received between internal users," explained Delano.

"An analysis of responses by type of firm shows that institutional broker-dealers and hedge funds are most likely to use IM. Functionally, trading and trade-related operations are using IM more than their colleagues in other areas within a given firm."

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