Whatsapp + Finance could equal potential fines or an unprecedented opportunity


How much does using WhatsApp cost? While the average user would rightly answer free, JP Morgan employees could just as well reply “$200 million,” the amount the company was fined for employee WhatsApp use. That fine brought a very important question to the forefront of finance and business: how can financial institutions incorporate WhatsApp – which claims 50 million+ businesses as users– to provide ease of use but do so without facing a compliance nightmare?


In December 2021, JPMorgan was hit with $200 million in fines because of federal laws requiring records of electronic messages between brokers and clients. SEC officials claimed that JPMorgan’s failure to preserve offline conversations violated federal securities law and left regulators blind to exchanges between the bank and its clients. While the fine was undoubtedly justified according to the letter of the law, simply banning WhatsApp use creates communication issues for employees at financial institutions and potentially when it comes to customer experience as well.


Many banks are using WhatsApp for communication purposes. The incident with JPMorgan is proof of this, with employees across the board using it, from managing directors and senior supervisors to lower-level employees. Recently Bloomberg reported that Deutsche Bank AG issued a memo warning employees against deleting business-related messages that are sent through private channels. The company’s staff was reportedly reminded that using messages sent from private phones for business purposes violates company policies and may be considered a crime in the US. Employees were also discouraged from deleting WhatsApp messages from their devices in order to ensure compliance. 


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Meeting legal requirements to safeguard customers and businesses, such as the effective recording of messages and the logging of all communication are elements that need to be implemented to make WhatsApp and other instant messaging platforms accessible across industries. Encrypted messaging is a safe form of communication that, if made accessible, will enable a wide variety of industries, such as the banking industry, to incorporate WhatsApp and other messaging platforms effectively and responsibly into their range of services.


Banking customers expect a fast, personalized service that can also be delivered via IM. There are only 25 countries in the world where WhatsApp is not the market leader. Messaging apps are now more widespread than ever before and often boast more influence than social networks. Around 2.9 billion people now use Messenger and WhatsApp alone, with this figure projected to grow considerably by the end of 2022. Considering the number of people who use instant messaging applications on a daily basis, it is undeniably a forward-thinking and productive move for businesses to incorporate instant messaging services into their customer service offerings. 


Today’s consumers, particularly the younger generations, demand greater interaction with companies through instant messaging. While the demand is greatest in the retail industry, the need is growing in the financial services industry too. More than a quarter of Millenials are completely reliant on mobile banking apps, using these to carry out all banking services from depositing cheques to paying bills, without setting foot in a physical bank branch. GlobalData discovered that even in 2018 almost 40% of millennials in Asia-Pacific locations were contacting their wealth managers via a chat application. Gen Z would rather instant message their bank than visit in-branch, showing that ted-led engagement is the major demand for the future of banking.


Increased communication between customers and banks can help improve the financial lives of customers, making it easier for customers to receive answers about their finances, carry out tasks and  also encourages better management of finances, offering greater accessibility and visibility to customers. 


Technology is changing rapidly and messaging platforms, already ubiquitous are a major place where customers and finance professionals already “reside” and increasing a primary place for business and customer service. While industry regulations make the use of Whatsapp and other platforms a potentially high-stakes affair, simply banning the technology will ensure that it remains a vulnerability. Those banks that incorporate messaging platforms in a compliant manner, however, will enjoy a major financial payoff and most importantly, a very grateful customer base.

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