The Impact of iMessage Compliance on Financial Institutions

iMessage, a messaging service exclusive to Apple devices, has revolutionized how Apple users communicate within the iOS ecosystem. Launched in 2011, this feature-rich platform allows users to exchange text messages, multimedia content, and create group chats, all with the assurance of end-to-end encryption for privacy and security. It syncs messages across multiple Apple devices via iCloud, meaning loyal Apple users can access their chats from any of their devices. With its unique ‘flair’ features like message effects and Animoji, iMessage has become a significant competitive advantage for Apple.

 

The number of iMessage users around the world was estimated to be 1.3 billion in 2022. While this is a relatively healthy chunk of the market (16.25%), what is particularly interesting are the indicators that this number will continue growing. Recent research has shown that iPhone sales among young users in the US, particularly in the 18-24 age bracket, (commonly known as Generation Z) are growing rapidly. The adoption rate of iPhones among Gen Zers surged from 47% in 2018 to 79% in 2023 signifying a strong preference for Apple’s flagship device.

At the same time, internal Apple research has shown that  85% of iPhone users largely rely on iMessage for communication. As a result, iMessage’s user base continues to expand across the US, with all indications that it will only increase – 55.2 million iPhone units were sold in the first quarter of 2023. 

Using iMessage has taken on an ‘elite’ status, and given the high number of users this platform has, it is critical for financial organizations to bring it under their regulatory compliance umbrella.

 

In this blog, we will explore the significance of iMessage compliance for financial institutions, the regulatory landscape and its challenges, as well as what good solutions for managing iMessaging would look like. 

Regulatory Landscape and Communication Compliance

The finance industry has recently begun focusing more heavily on communication compliance. This follows a number of instances where companies in the sector were found to be violating critical rules and regulations of governing bodies, particularly those related to the issue of recordkeeping.

 

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) in the US, as well as many other financial agencies worldwide, require that companies keep complete records of all their transactions and activities.  This is known as the ‘Books and Records Requirement’ and compliance with these rules is taken very seriously.

 

As new forms of communication have emerged, regulators have had to update their guidelines to address potential risks and ensure compliance across the industry. Newer regulations have been put in place that make it clear that all business-related communications, including electronic messages sent and received over personal devices, must be retained in order to remain in compliance with applicable recordkeeping requirements.

 

Regulators are actively monitoring financial institutions to ensure their compliance with these communication regulations and are conducting regular audits. The consequences of non-compliance can be severe, often resulting in significant fines and penalties for financial institutions.

 

For example, FINRA recently fined Deloitte Corporate Finance $200,000 as a part of a settlement related to its failure to retain business-related iMessages sent and received by its representatives. In 2022, the SEC fined a number of big-name firms a total of $1.8 billion due to employees using private texting apps such as iMessage to discuss work but not retaining those messages.

 

Balancing innovation with compliance is crucial for financial institutions seeking to leverage communication technologies effectively. It has become clear that employees and clients can’t be forced away from their preferred communication channels, and prohibiting their use has been proven to be an ineffective strategy. For example, in 2021 JP Morgan was fined $200 million because of widespread use of unapproved communications using WhatsApp, iMessage, and other communication platforms. They were also failing to retain copies of these communications.

 

It is clear that financial institutions have to find a way to embrace innovation in communication while ensuring that it remains in compliance with regulatory requirements. 

Compliance Challenges with iMessage

iMessage poses some unique challenges for financial institutions. Some issues that need to be considered include: 

• Encryption and Access: iMessage uses end-to-end encryption, and while this enhances security, companies may find it difficult to access and monitor these encrypted messages. Balancing user privacy with regulatory requirements becomes a complex task.
• Recordkeeping and Archiving: With iMessage, archiving messages can be challenging, particularly if employees use personal Apple IDs for business purposes. 
• Bring Your Own Device (BYOD) Risks: Many financial institutions have adopted BYOD policies, allowing employees to use their personal devices, including iPhones and iPads, for work-related communications. This raises compliance concerns, as it becomes challenging to separate personal and business messages. 
• Cross-Platform Communication: Most financial institutions use a mix of communication tools and platforms, and employees switch between them throughout the day. This makes it harder to centralize communication records and maintain consistent compliance practices.
• Data Security: As iMessage handles sensitive financial information, the risk of data breaches is a major concern. Financial institutions must take measures to safeguard information transmitted through iMessage and prevent unauthorized access or data leaks.
• Third-Party Apps and Integrations: Employees might use third-party apps or services within iMessage, introducing potential compliance risks. Financial institutions must be aware of these integrations and ensure they do not compromise data security or compliance.
• International Compliance: Financial institutions operating across borders face additional challenges in complying with varying communication regulations in different jurisdictions. The use of iMessage may add to these complexities, and this will need to be carefully navigated.
• Updating Compliance Practices: Given Apple’s role as an innovative company that upgrades devices and software rapidly, it is important for companies to stay on top of any changes to the iMessage app and its capabilities. At the same time, regulatory bodies need to be watched for their reactions and updates as the technology advances. 

Considerations When Choosing an iMessage Management Solution

Given the importance of remaining compliant with regulations and requirements, it is critical that financial businesses build the right technology stack to ensure that little is left to chance or human intervention.  

Selecting an iMessage management solution requires considering various factors:

• Security Measures: Robust security features, encryption protocols, and protection against unauthorized access are essential.
• Data Storage and Scalability: Scalability is crucial for accommodating data growth cost-effectively.
• Ease of Retrieval and Search Functionality: A user-friendly archiving solution with robust search capabilities is essential for quick and easy retrieval of records when they are needed.
• Compatibility with BYOD Policies: The solution should capture iMessages from personal devices used for business communications.
• Integration with Existing Systems: Seamless integration with other communication platforms enhances compliance efforts.
• Vendor Reputation and Support: Choosing a reputable vendor with excellent customer support ensures reliability.

LeapXpert Unveils First iMessage Communication Capture Solution for Regulated Industries

LeapXpert added iMessage data capture and archiving to its Communication Management Platform in early 2022, and has consistently upgraded this capability.  Now, in addition to being able to capture, monitor, and archive messages on WhatsApp, WeChat, Telegram, Signal, Line, and SMS, it can do so for iMessage too. LeapXpert’s Communication Platform enables employees to engage customers and colleagues through their preferred messaging apps, while still remaining compliant with regulatory requirements for record-keeping.

 

With Governed Mode, enterprise employees can communicate with clients in real-time using LeapXpert’s dedicated app, Leap Work and Leap Work for Microsoft Teams, available on Desktop, iOS, and Android devices. The platform also includes essential enterprise controls such as Data Leakage Prevention, Content Disarm Reconstruction (CDR), and antivirus features to ensure compliance with corporate policies and data security.

 

LeapXpert’s Communications Platform is designed to facilitate secure and compliant communications between employees and clients on messaging applications and voice channels. It empowers enterprise employees to use the intuitive iMessage app for communication with external parties while adhering to record-keeping and data security regulations. The platform’s capabilities help enterprises maintain strict governance policies and meet regulatory compliance requirements effectively.

 

By integrating with leading archiving systems, the platform ensures that all iMessage conversations are retained and accessible in one place, meeting regulatory compliance requirements.

Bring iMessage Into the Fold

Given its growing popularity, particularly with the people who are future clients and employees, iMessage can’t be ignored as a significant communication channel, and therefore a regulatory risk. As the financial industry grapples with the ways in which off-channel communication platforms need to be brought into the mainstream, it is essential that institutions are already doing everything they can to ensure they will be able to quickly and effectively adapt to new regulations and new technological innovations.

 

Fortunately, LeapXpert does all of that work for you. By constantly integrating the latest communication channels into their communication platform and ensuring that you are able to meet all your regulatory obligations related to communications retention, they are the ideal partner in this rapidly changing landscape. 

Visit us to find out more or book a demo.