Four major banks -- Bank of New York Mellon, Deutsche Bank, Credit Suisse and Goldman Sachs -- have reached an agreement with New York State's Department of Financial Services (DFS) over record keeping for the Symphony messaging system.
As part of the accord, the banks will keep a copy of chat messages with customers for seven years. In addition to this, they'll store duplicate copies of decryption keys for their messages with independent custodians.
Bank of New York Mellon, Deutsche Bank, Credit Suisse and Goldman Sachs are part of a consortium comprising 14 financial institutions that use Symphony messaging service. The agreement reached with the four banks is also applicable for all the banks in the consortium.
The DFS views that chat room transcripts and other communication with banks might lead to find out whether any attempt is made to rig interest and foreign exchange rates. So the Department of Financial Services is looking at data deletion and end-to-end encryption.
Symphony Communications LLC will retain the copy of communication in electronic format for seven years as part of the agreement reached by banks with NY regulator. It'll also store duplicate copies of decryption keys for their messages with independent custodians as it was agreed in the accord.
New York's Department of Financial Services in last July ordered Symphony to furnish details about document retention and deletion, encryption services and open source features. This data comprising all types of communications with clients should be made available on record, said the DFS.
Symphony recently tied up with Dow Jones and Co, owner of The Wall Street Journal and Dow Jones Newswire. Under the agreement, it'll provide news content on Symphony service. News Corp is the owner of Dow Jones.
Banks have decided to use the services of Symphony, which is a messaging and communication start up based in Silicon Valley, for staff to communicate easily and more securely. The low cost service is scheduled for launch this week.
The DFS in July asked the banks that fall under its jurisdiction, to furnish more details about Symphony's messaging services including 'end-to-end encryption.'
Anthony Albanese, acting superintendent at DFS, said: "We're pleased that these banks did the right thing by working cooperatively with us to help address our concerns about the new messaging platform. This is a critical issue since chats and other electronic records have provided key evidence in investigations of wrongdoing on Wall Street.'
Senator Elizabeth Warren in August sent a letter to six federal financial regulators on concerns about messaging services. The senator had sent the letter to six regulators to focus on Symphony messaging services as companies use them to reduce compliance and enforcement concerns, the Senator said.
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