Employees of NatWest have been banned from using WhatsApp for work as part of a clampdown by the bank following an industry-wide controversy that led to fines totalling more than $2.5 billion for other banks in the United States.
The FTSE 100 lender, which is one of Britain’s biggest banks and is taxpayer-backed, is understood to have blocked several apps last week, including Skype, Facebook Messenger and WhatsApp, from the work devices of its staff.
The move is aimed at enforcing guidelines at the group that restrict business communications to channels that allow information to be retrieved. It follows a wide-ranging clampdown by US financial watchdogs over workers’ use of unauthorised electronic messaging, which in turn has led to increased regulatory scrutiny in Britain.
The issue was thrust into the spotlight three years ago when the Securities and Exchange Commission and the Commodity Futures Trading Commission, two American financial regulators, began fining firms over breaches of record-keeping rules for letting their employees send messages that could not be recovered.
Strict compliance rules require banks and other financial businesses to keep tabs on their employees’ communications, to help regulators fight wrongdoing such as market abuse and other misconduct.
The emergence of popular messaging apps in recent years, including encrypted platforms such as WhatsApp and Telegram, has made it harder for firms and regulators to police financial workers’ communications. The Covid pandemic accelerated the use of these messaging apps when lockdowns forced bankers, traders and fund managers to work from home.
JPMorgan Chase was the first to be hit with a fine in late 2021 when it agreed to pay $125 million to the SEC and $75 million to the CFTC over the use of WhatsApp, personal email accounts, text messages and personal devices by its employees, including senior staff members, to discuss business.
Since then the American regulators have levied multimillion-dollar penalties for record-keeping violations on a string of firms, including the Wall Street giants Goldman Sachs, Citigroup and Bank of America as well as the British lenders Barclays and HSBC. The fines, which have also been imposed on units of Invesco, the investment group, have amounted to more than $2.5 billion.
NatWest, which is mainly focused on the UK and is 11.4 per cent owned by the government, is not among lenders penalised by the American regulators.
While the US has led the way on clamping down on messaging apps, the issue is also now on the radar of the Financial Conduct Authority, the British regulator.
In 2022 the authority undertook an exercise to examine the policies that financial firms have in place governing the use of unmonitored and encrypted communications by staff.
It is also in the midst of follow-up work assessing any changes that companies have made to their procedures in the light of the fines levied in the US. This second round of scrutiny by the UK regulator has involved asking financial firms to provide details of any recent breaches of their policies governing unmonitored communications.
NatWest has for years issued guidance to its employees about acceptable and prohibited forms of communication.
A spokesman for the bank said: “Like many organisations, we only permit the use of approved channels for communicating about business matters, whether internally or externally.”
