Unfortunately, while Instant Messaging (IM) systems have the ability to change the way financial service companies interact for the better, many of today’s implementations pose problems and challenges to address. IM technology has the benefits of gathering input from many different people in dispersed locations. This adds speed and ease to workplace communication, and presence detection eliminates the time typically lost to missed telephone calls and wasted trips to see colleagues. Speed and efficiency are increased from knowing the status of financial transactions in real-time. A main challenge in financial compliance is the regulatory financial framework, which forces financial service companies to archive IM conversations. Poor management in security and retention controls increases the legal risk and personal accountability to corporate officers. Consumer-grade IM has potential for security breach and the leak of corporate data which can be particularly devastating to financial service companies. IM is widely used to distribute research, negotiate prices, execute orders, and stay in touch with clients and colleagues. It provides a direct mode of communication with co-workers, clients and other broker-dealers that enables far closer and more personal relationships. Imposing an IM ban could result in the loss of clients and valuable employees to competitors who are more tolerant of the use of IM in the financial markets. Key recommendations include:
Installing an enterprise-grade IM system for all employees in the firm. The addition of consumer-grade IM for client facing employees to keep client loyalty. Educating employees on a company IM policy including regulatory guidelines and using IM for personal use. Enforcing rules through software that monitors and records IM conversations, and also through disciplinary action. Forming a management team to coordinate a strategic IM plan that meets all regulatory and legal needs and effectively solves the challenges and problems discussed. Continuously investing in new technology, updating IM policy, and educating employees to meet long-term regulatory and security requirements, and issues regarding the future direction of the firm. Introduction
Instant Messaging (IM) was the first mass based communication application rolled out by users, rather than management who saw immediate business value in this new form of communication. Financial Industry and Government regulators have clarified IM as a form of real-time written correspondence that creates a business record. This paper seeks to explain the risks and problems IM brings to the financial services industry and challenges for management, such as determining the effect on employee productivity. This paper reviews the benefits IM brings to the financial services industry, in the form of improved communication, collaboration, efficiency, monetary benefits and information archiving. It also discusses the problems and challenges that management should be aware as well as the impact on the business, and makes recommendations for addressing these issues and achieving benefits for financial service companies. The Potential Benefits that can be gained from IM
There are many arguments for the use of IM as a communications tool in the business environment, including improved brainstorming capabilities and the ability to multitask. Many workers today use the telephone and IM simultaneously, so they can chat with each other privately while, for example, on a group call to a client. Ellen Isaacs (2005), reports that “users like that they could respond to quick IM questions from co-workers while engaged in another task, such as talking on the telephone, or processing documents or email.” Studies note the ability to multitask is a major benefit of IM in the workplace. Current theory emphasises the value of informal social interactions for...