Citigroup has removed traders in its foreign exchange division from internal chat groups on their Bloomberg terminals, in the latest sign of concern by banks over online security issues.
Bloomberg has come under fire over the past week from some of its largest clients over concerns that its journalists accessed private details regarding how they used its powerful financial data terminals.
Citi said the decision to close the Bloomberg chat rooms had been taken before the recent complaints were made. “This move has been in the works for some time and is unrelated to recent issues,” the U.S. bank said.
The bank will move its traders, many of whom are based in London or New York, on to an internal platform to share information by the end of the month. Traders will still be allowed to use Bloomberg’s instant messaging service to contact each other internally and to contact people outside the bank.
Bankers have long expressed concern that confidential client information could be leaked via chat rooms and use of instant messaging, which is a popular tool for traders to communicate with clients and even agree prices for trades.
Citi said shutting those chat groups would increase security and had the advantage that not everyone would need a terminal to access live internal information about clients’ trading activities – a sign that the bank is also seeking to reduce costs. Bloomberg charges up to $20,000 (U.S.) a year for the use of a terminal and almost all traders at investment banks have sole use of a terminal at their desk.
The move is also an attempt by Citi to steer both traders and clients away from relying on news wires and towards its own internally produced market news.
Other banks also use internal chat groups via their Bloomberg terminals. Comments made in the internal chat group can be seen by all members and are used to share information about what clients are buying and selling. Many use code words to identify clients due to security concerns.
Citi is believed to have decided against banning the use of instant messaging because many traders use it to communicate with clients outside the bank. But insiders said that even the decision to ban the chat group had led to complaints from traders who were resisting the change.
Senior bankers across the industry have expressed frustration at traders’ failure to wean themselves off instant messaging to share confidential information following high-profile leaks of messages made public by the UK regulator as part of its investigation into the global rate-rigging Libor scandal.
Bloomberg apologized for allowing reporters access to “limited client information” and appointed an executive to review data compliance policies after Goldman Sachs raised concerns about confidentiality last week.
Bloomberg has since disabled reporters’ access to information about when customers log in, which of the terminals’ roughly 15,000 functions they access and what contact they have with its helpdesk.
A Citi spokesperson said: “The decision to migrate two internal chat rooms onto our proprietary system for our foreign exchange traders was a business decision made last year and is not related to any concerns over data privacy.”