HSBC Holdings Plc (LON:HSBA) has initiated a block on text messaging through company-issued devices, a move that follows an earlier ban on the use of WhatsApp for work-related communications. The decision comes as a response to ongoing regulatory investigations into unauthorized communication methods within the banking sector. However, certain employees in regulated roles retain the ability to text, provided their activities are archived.
This development is part of a broader examination by financial watchdogs into the communication systems employed by traders, dealmakers, leading private equity companies, and hedge funds. The focus is on how these communications are monitored to prevent financial misconduct, including market manipulation.
Earlier this year, HSBC faced significant penalties from US regulators such as the Commodity Futures Trading Commission and the Securities and Exchange Commission due to its failure to supervise communications on unapproved messaging applications.
The wider banking industry has also been subject to similar fines for contravening record-keeping rules. Notably, financial institutions including Bank of America Corp (NYSE:BAC)., Wells Fargo & Co., Barclays Plc, and Citigroup Inc (NYSE:C). have collectively paid over $2.5 billion to US regulators for these infringements.
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