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Convenience vs. compliance: Secure instant messaging in the financial services industry


Client communication in a private wealth management or financial services context can be challenging. People have become used to a certain level of convenience in their interactions with various brands or for personal messages.

However, the nature of financial conversations means that the convenience needs to be matched by a similar level of security and compliance. This is essential to maintain client trust, protect the organization, and to adhere to regulatory requirements.

Due to these challenges, financial institutions – particularly in private wealth – need to adopt secure methods of client communication, ensuring that all archived messages are recorded in an encrypted environment. This is where secure instant messaging stands out as a key feature in building relationships.

The challenges wealth management firms are facing

Financial institutions are facing serious challenges from a number of angles to balance security risks, privacy risks, and compliance, while remaining relevant to their clients.

A rise in cyber security threats

Cyber attacks and data security are always of concern to clients and institutions alike. This is not helped by the surge in attacks. According to the IBM data breach report, in 2022, 83% of organizations suffered from more than one data breach. According to the 2022 Verizon Data Breach Investigations Report, this represents the same percentage rise of ransomware attacks as the previous five years combined.

In the finance sector, data breaches can have severe consequences on clients, threatening investments, business success, or even their livelihoods. But this isn’t the only issue that institutions need to contend with.

Complying with regulatory bodies

The rise of new touchpoints and means of communication opens up complex challenges in terms of conversation recording, which is essential to adhere to regulatory requirements. Unless using specific technology, it can be difficult to record voice calls, video calls, or other private conversations.

Likewise, popular messaging apps, which are widespread in a financial services context, are often not properly suited to the situation. Whether WhatsApp, Facebook Messenger, or similar messaging apps, the convenience they bring is accompanied by substantial risk. Widespread use of these channels puts client data security at risk, but it’s not the only issue facing wealth management firms.

Regulators are waking up to the reality and responding with harsher fines for firms and private banks that don’t take secure instant messaging seriously. In fact, eleven of the world’s largest brokerage firms and banks had to pay $1.8 billion in collective fines recently due to this.

Balancing compliance with convenience

While data security and regulatory compliance should be a key issue for wealth management firms, it cannot come at the expense of convenience. The reason a large subset of advisors are turning to popular messaging apps despite the significant risks is because clients want it.

Across generations, there is a trend towards additional features and robust digital service capabilities, particularly among younger clientele. In fact, according to Refinitiv’s Wealth Management Report, 34% of millennial and 35% of Gen X investors state that digital services are important when choosing an advisor.

Overall, clients want simplicity. A reported 30% of Refinitiv’s respondents want all of their investments to be accessible from one place, including investments from other institutions. The same percentage stated that they want easier access to products and services, and 27% believe having direct access to an advisor is important.

The role of secure messaging apps

There’s no doubt that the various threads of ensuring convenience and compliance while mitigating security risks are difficult to tie together for all parties involved. The key to success is in providing advisors with the tools to carry out their jobs in a way that not only offers the experience clients want, but actively improves it.

Secure messaging apps, such as Unblu Secure Messenger, that are convenient and multichannel – contributing to an omnichannel experience – allow institutions to walk the tightrope and provide a relationship-building experience that boosts profit.

Secure communication

With private messaging apps like Unblu Secure Messenger, all digital communications are automatically recorded across touchpoints for easy transparency reports. Whether the client or advisor messages on a laptop, mobile device, or similar, the messages are encrypted and recorded.

The entire Unblu Conversational Engagement Platform has the highest security standards available, with the ISO 27001 certification and SOC-2 Type 2 audited. What’s more, the secure messaging app also avoids security risks as it’s embedded in protected environments, such as client portals or e-banking apps.

Maximum convenience

The primary reason that advisors use more popular messaging apps such as Facebook Messenger has nothing to do with security features. In fact, it’s because the client prefers to communicate on channels where they’re already active users. Secure instant messaging apps allow this to take place, without any sacrifices in terms of security features.

The app can be fully integrated into whatever existing infrastructure the firm has in place, such as portals and mobile apps, allowing for maximum sharing capabilities. Key features like the built-in messaging protocols and encryption protocols mean that clients and advisors can safely share documents, text messages, files, and images. Furthermore, as with popular apps, there are immediate feedback systems, so users know if their advisor is online or typing, and allowing the advisor to update their status and manage expectations.

A full omnichannel experience

Popular applications are limited in their ability to function across channels. For example, it’s impossible to move from messaging channels to video calls or Co-Browsing sessions, particularly if the client and advisor need to operate within an encrypted environment.

Secure chat apps, however, don’t exist in isolation. They work as part of an overall conversational engagement strategy, which allows private messages to be shared over multiple channels. This enhances the experience in multiple ways. Firstly, it allows any messages or documents shared to be easily accessible no matter where they’re first sent. If sent via Secure Messenger, they’ll also be available in the client portal later on.

What’s more, when it comes to instant support or advice, the omnichannel capabilities allow for easy, graceful escalation, without putting the client or organization at risk. A chat conversation or voice messages can move to a phone or video call, which can then lead to using the Co-Browsing collaboration tool. This allows the advisor to match the level of service to the moment, and boosts their chances of accelerating AUM growth or making new conversions.

Ensuring secure instant messaging in sensitive situations

Conversations surrounding financial data can leave clients open to a number of security issues. There’s no doubt that many malicious actors are trying to take advantage of insecure instant messages or unencrypted file transfers. We see the results of this in the news with alarming regularity.

However, by providing a secure messaging service that guarantees a high level of encryption by default, wealth management firms can ensure convenience without sacrificing security. Ensuring encryption between users and any extra layers of security is simply an industry standard. Clients need to be confident that any file sharing, location sharing, credit cards, financial details or similar sensitive information is guaranteed to have secure encryption.

But the issue goes beyond client trust and regulatory compliance. By ensuring strong security standards and online privacy while also offering the gold standard experience that clients expect, firms can more easily share interesting investment opportunities and leverage the moment of truth to drive long-term growth.

Interested in finding out more about how private chat messaging apps with robust security features can benefit individual users and financial services institutions? Request a demo today!