UK banks failing to regulate IM use

UK investment banks could be putting themselves, and investors, at risk by allowing employees to use unregulated instant messaging (IM) networks to exchange business and financial information, according to research.

A study by Vanson Bourne Research and FaceTime Communications indicates around half of companies in the UK investment community admit the use of IM networks is widespread within their organisations.

More worryingly, they are aware that important transactions are being made via free IM networks.

"Instant messaging has developed into a serious business application within the financial community which is now used alongside the phone and email for front-office communications," said Graham Opie, director at Vanson Bourne.

"Monitoring of email is now corporate policy for most institutions, but regulatory pressure does not yet seem to have extended to IM conversations that happen on free, public networks."

The study, conducted in June, indicated that policies on managing and tracking IM communications have not been implemented in as rigorous a fashion as for email or other forms of interaction.

"Unregulated conversations are harmless fun for your average consumer, but not in a high profile, high value industry with strict corporate governance standards," warned Glyn Baker, UK director of business development at FaceTime.

"Headline financial transactions are being done effectively 'in the wild', in the same breath as comments on Big Brother or the latest Chelsea signing, and with tools that are free on the internet."

Some 36 per cent of firms have a company policy to restrict IM, while 27 per cent tolerate it and 18 per cent encourage it. A fifth of companies do not have a policy at all.

Some of the 50 institutions interviewed, the research found, have chosen to ban IM completely rather than attempt to manage its use. But, even among the companies that disallow IM, only one in three has specific technical blocks in place.

A tenth of the IT departments surveyed admitted they had no idea how many employees were using IM services.