Traders from several banks have been banned from chat rooms in the wake of scandals, including the manipulation of the Libor interbank lending rate.
According to the FT report, a senior banker close to RBS’s decision to ban the use of chat rooms said: “The bank clamped down on this big time. I think we were even going slightly overboard on this.”
The report said that following manipulation of the Libor interbank lending rate, RBS last year banned unmonitored chat rooms where traders discussed market topics with rivals. It said in the last few months that Citi banned chat rooms with multiple banks, restricting instant messages to conversations with traders from one institution at a time.
Banks are increasingly using social media to enable employees to interact and improve customer contact but the highly regulated nature of the finance sector means CIOs must have controls in place to prevent breaking rules and large fines.
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Chris Skinner, chairman at the Financial Services Club, said it is always difficult to manage the use of social media in the banking sector. “There are always going to be people who try to beat the system.”
He said most banks ban the use of social media platforms such as Twitter and Facebook in the office. “But some banks are now starting BYOD schemes, which will make it even more difficult to control use.”
“The technology is ahead of the regulation in banking,” added Skinner.
Rik Turner, analyst at Ovum, said the early stages of social media came to banks' attention quickly when they had to check customer sentiment through monitoring comments made about them on platforms such as Twitter. But the use of social media by traders brings new challenges to IT departments at heavily regulated investment banks.