NY regulator sets sights on bank-backed messaging service

NY regulator sets sights on bank-backed messaging service

New York state's banking regulator has written to the firm behind a new instant messaging service backed by Wall Street's biggest banks asking about its document retention policies.

Backed by Goldman Sachs, Citi and JPMorgan, among others, Symphony Communication is preparing to challenge Bloomberg's dominance as the default messaging medium for traders when it launches later this year.

However, the service has attracted the attention of New York Department of Financial Services Acting Superintendent Anthony Albanese, who has written (PDF) to Symphony CEO David Gurle seeking answers on the data deletion, end-to-end-encryption and open source features of the product.

Symphony's own marketing material boasts of "Guaranteed Data Deletion" and that "data is 100% protected by encryption keys".

"As you may know, banks have a legal obligation under New York law to retain records of their operations," says the letter, which also notes that that chatroom transcripts have provided key evidence of wrongdoing in the recent FX rigging and Libor scandals.

The watchdog is preparing to write to the Symphony-backing banks it regulates - Goldman, Deutsche Bank, Credit Suisse and Bank of New York Mellon - to ask how they plan to use the technology.

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