Instant messaging is i
ncreasingly popular in financial services, but there is growing concern about new cybersecurity vulnerabilities firms the apps can introduce to firms.
A survey from software firm StarLeaf found 61% of employees at financial services firms find instant messaging the most effective way to communicate. Fifty-eight percent said the same of email.
In the U.S., the most popular app appears to be Microsoft Skype for Business, with LinkedIn Messenger coming in a distant second and WhatsApp in third place.
(More: High-net-worth investors not impressed by mobile wealth management apps)
According to StarLeaf, which sells an instant messaging and conferencing product, these apps can undermine network security, open financial services organizations up to data breaches and provide a point of entry for malicious hackers.
(More: This is the No. 1 cybersecurity threat to financial advisers, experts say)
Both
WhatsApp and
LinkedIn have experienced data leaks recently. And last July, the
Financial Industry Regulatory Authority Inc. issued an investor warning about scammers using Skype.
Yet the demand for mobile chat isn't likely to go away, and
firms across channels are still looking for tools that
let advisers securely and compliantly text message with clients.
The latest is registered investment adviser and
soon-to-be broker-dealer Independent Financial Partners. The firm has a new partnership with MyRepChat, a mobile app that gives advisers a separate phone number they can use to text clients. Messages are instantly archived and monitored by IFP.
Chris Hamm, IFP's chief operating officer, said advisers have been asking the firm for the ability to text for more than a year. As IFP set up its own broker-dealer and gained more control over the tech it can offer, Mr. Hamm selected MyRepChat.
Cybersecurity was a part of the vetting process, he said, and MyRepChat met all of IFP's requirements.
"In the world we live in, as technology evolves, especially in the wealth management space, cybersecurity is of the utmost importance," Mr. Hamm said. MyRepChat offers multifactor authentication and data encryption, requires strong passwords and automatically logs users off if they are inactive.
But technology can only go so far. As the
recent BlackRock data leak demonstrated, breaches can often result from human error. What's to prevent an adviser from accidentally texting client information to the wrong person?
MyRepChat actually scans messages that advisers send or receive for personally identifiable or other sensitive information, and can block something if it's inappropriate, Mr. Hamm said.
"Human error is going to happen," he added. "We're making sure [messages] are secure so even if something happens on the human side, [MyRepChat] can help mitigate the effects."
(More: 7 tips from the SEC on mobile communications)
