Friday, January 24, 2014

Plan to Ban Instant Messaging has Unintended Consequences

Goldman Sachs Group Inc. is planning to ban traders from using some computer-messaging services in a bid to protect proprietary information at the heart of its sales-and-trading operation.

Under a new policy, the Wall Street firm won't allow person-to-person communication over instant-messaging (IM) services created by Bloomberg LP, Yahoo Inc., AOL Inc. and other third-party providers including Pivot Inc., according to a draft of a memo reviewed by The Wall Street Journal.

Goldman is seeking to prevent information from internal conversations from being filtered and disseminated beyond the bank's walls. The planned ban reflects a mistrust of technology developed by messaging-service providers that can make its traders more efficient but also be used to mine private communications for closely guarded intelligence on securities pricing. (more)

FutureWatch: Expect other financial institutions to follow.

Unintended Consequence: Scraping (a Wall Street term for collecting useful tidbits of info) attempts will continue as always, but it won't be easy pickings anymore. Conventional spycraft (bugging and wiretapping) worked before IM came along. It continues to work, and will become the best option again. Technical Surveillance Countermeasures (TSCM) inspections are the most cost-effective defense.