Deutsche Bank says that regulator did not order curb on employees' mobile messaging

Tom Burroughes Editor London 17 January 2017

Deutsche Bank says that regulator did not order curb on employees' mobile messaging

Regulatory worries have driven Germany's largest bank to clamp down on the forms of communication that its employees can use.

Deutsche Bank's decision to curtail the use of electronic messaging services by employees on company-issued mobile phones was not an order from regulators but an internal decision, this publication has learned. 

A spokesperson for the bank has confirmed that a memo sent last week to employees ordered them to disable text messaging applications on work phones. Unapproved messaging services such as WhatsApp and Google Talk cannot be used for business purposes, even on personal phones, the note said.

The memo said: "We fully understand that the deactivation will change your day-to-day work and we regret any inconvenience this may cause. However, this step is necessary to ensure Deutsche Bank continues to comply with regulatory and legal requirements." 

Kim Hammonds and Sylvie Matherat, the lender's chief operating officer and chief regulatory officer respectively, signed the memo. Both are on its management board. 

The memo suggested that email services could replace some texting that employees do with external clients. The new restrictions take effect this quarter and all Deutsche Bank's employees are affected.

The Frankfurt-headquartered banking giant has been under fire from regulators and has paid hefty fines in the past for allegedly lax communications controls and its failure to keep electronic voice recordings and other records as required.

“Over time, technology has expanded and so have regulatory requirements,” a person familiar with the matter told this publication, asserting, however, that the bank's decision to restrict staff members' communications was “not an order from regulators.” 

“Management has decided to do this because of challenges relating to monitoring and maintaining staff communications. It was an internal decision,” the person added.

Earlier this month, the German lender agreed to pay $95 million to settle a US government lawsuit alleging that the group committed tax fraud for using “insolvent” shell companies to conceal significant tax liabilities from the Internal Revenue Service in 2000.

In December last year, Deutsche Bank agreed to a $7.2 billion settlement with the US Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis.

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