2 November 2004

Specialist IT consultancy Detica is warning financial institutions to employ smarter security measures to stop staff abusing technology to illegitimately disclose sensitive client and price information for personal gain.

Paul Stokes, Head of Capital Markets at Detica, says that the main threat comes from equipment which is largely unmonitored at present including instant-messaging (IM), web-based e-mail such as Hotmail and mobile telephones - both voice calls and SMS ('text' messaging).

City leaks via instant messaging have hit the headlines recently but Stokes says it is possible to stop them. "Contrary to popular belief, instant messaging is traceable and there are both hardware and software solutions available to track all these forms of communications. The problem is that only a handful of financial institutions are getting to grips with the issue. The risk of damage to the reputation of the bank caught out is high and needs to be taken much more seriously," he said.

Moreover, Stokes warns that although telephone calls between traders are recorded, very few financial institutions monitor the content and can struggle with the sheer volume of data stored. "Rogue traders are going unpunished because a large number of financial institutions don't have the means to make any sense of the huge quantity of data they record. The only way is to automate the process of analysing data and deploy tools which not only look for key words, but are intuitive enough to spot more subtle signals - such as the use of code words or a foreign or obscure language.

Stokes concludes: "As we've seen, it only takes one trader acting outside the rules to bring a whole financial institution to its knees. These people will always try to push the boundaries, using new methods and technologies to get around the system. It's up to the banks to stay one step ahead."

Nick Miles Text 100 Public Relations Tel: +44 (0)208 846 0700 email: