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The Risks and Benefits of Slack in Financial Services

Slack surpassed the 12 million user mark in 2020, with new accounts surging as more companies embrace remote work. The platform is one of the top business communication apps for industries across the board, including the heavily-regulated financial sector. This guide will explore the benefits and challenges of Slack as a tool for digital collaboration in banking and financial services.

The Risks and Benefits of Slack in Financial Services

Slack is more than just a communication platform, and its use cases are varied. As the financial sector undergoes digital transformation, it has a huge role to play in both internal and external collaboration. 

When it comes to internal business use, Slack is highly adaptable. Banking executives, project managers, and financial professionals can create separate channels for each department or project. Channel administrators can pin important documents to each channel to ensure everyone is on the same page. Video calls are also available within Slack, which turns the platform into a virtual conferencing solution. Some banks, such as the cloud-based Monzo, are even using Slack to streamline their incident monitoring and management processes.

In addition to internal use, Slack enables financial institutions to maintain more efficient communications with external parties; customers, investors, partners and more. Thanks to Slack, digital collaboration in banking has never been easier; however, every technological solution comes with its challenges. While Slack streamlines communication, projects, and collaboration, it also leaves financial institutions open to certain  vulnerabilities. Whether internal or external, each use case brings its own set of compliance challenges.

Let's take an in-depth look at Slack's benefits and risks, to help your financial institution make the most of this app with minimal risk.

The Benefits Of Slack For Digital Collaboration in Banking

Internal and External Goal Alignment in the Banking Sector

Whether facilitating the collaboration of internal or external parties, when it comes to shared objectives, Slack helps to ensure everyone is singing from the same hymn sheet. 

Successful investor relationships and fintech partnerships are predicated on goal alignment. The goals and responsibilities of all parties must align to achieve the best possible outcome. Slack also has a crucial role to play when it comes to this internal goal alignment –  crucial for interdepartmental collaboration within financial institutions. The objectives of the account sales team must align with the goals of the bank marketing team to maximize revenue. Customer experience goals must match customer support goals to recruit and retain customers. All this can be achieved through considered use of Slack.

Digital meetings are easier to attend than in-person meetings, especially for people located further away. Meeting planners don't have to worry about catering or booking conference rooms. There's no need to record minutes since Slack keeps track of all digital correspondence.

Clients Prefer Online Solutions

Slack isn't just a collaboration solution for executives and departments. Banks also use Slack to communicate with clients and customers outside of the financial institution, by including external partners in guest channels

This trend is in keeping with the slowing down of branch traffic and an increase in online banking. Studies show that customers and clients prefer online alternatives to visiting the bank. This trend is forcing financial services institutions to invest more in remote job roles and digital collaboration tools.

Slack Solutions for Financial Advisors and Investors

Regular bank account holders don't typically go beyond the bank's website for their online banking needs; however, investors have a different relationship with banks.

Retail investors  work closely with their financial advisors to make wise and lucrative investing decisions; this type of collaboration has historically taken place in-person. Times have changed, and today's investors are looking for online alternatives themselves without sacrificing the value of in-person communication.

Slack helps financial investors retain their relationship and rapport with clients as in-person meetings become less frequent. Digital investment platform, Wealthsimple, uses Slack to deliver speedy, personal and human customer support – eliminating the frustrating delays that email can cause. Financial advisors can create separate guest channels for investors' questions and investment follow-up chats.

Slack's file transferring capabilities allow advisors to attach documents to chats; plus, both parties can keep digital records of their communication and financial documents, preventing information from falling through the cracks.

If a bank executive needs to talk with multiple investors or an investment firm, Slack allows team calls of up to 15 participants. Participants can be located from anywhere in the world, which makes Slack an invaluable tool for global collaboration.

The Benefits of Slack for Bank Customer Support

Rapid response is essential for financial customer support. Money is emotional, and customers want help instantly. Smart financial institutions use Slack to escalate support tickets to the appropriate channels; this method is essential for VIP support requests from important clients.

Slack helps customer support teams retrieve information from the right sources. If an answer isn't available in a knowledge base, a customer support agent can instantly contact the appropriate specialist through Slack. Institutions can also create separate Slack channels for customer support questions, challenges, and updated training.

How Slack Benefits IT Security Teams

IT departments are invaluable to banks and financial institutions. Everything from server crashes to hacking threats can send a bank into a panic. Rapid response to these issues is absolutely essential.

The same IT team that maintains Slack security also depends on Slack for day-to-day operations and urgent tasks. Like a bank's customer support department, IT teams use slack to escalate security tasks to the right point-person. When a financial website or server crashes, the IT team is on it, and they rely on Slack for instant problem solving and collaboration.

IT teams also use slack to communicate security issues to other departments. They may need a department manager to shut down their network or monitor an interdepartmental security threat. Slack is also valuable for communicating troubleshooting timetables and updates.

New Bank Employee Onboarding

As financial institutions grow, it becomes harder to invest in employee success. Bank managers are often responsible for large teams underneath them. Without digital solutions, it's virtually impossible to develop new employees one-on-one.

Slack allows managers to be in more places than one without the overload. With every role and department at their fingertips, they can communicate with one or multiple employees at once. Slack helps managers devote more time to developing employee growth and responding to departmental concerns.

One way bank managers leverage Slack for long-term employee success is onboarding

Think of Slack as a "one stop shop" for new employees. Bank managers can devote an entire channel to training tools, employee questions, protocol updates, Slack compliance, and employee incentives to drive healthy competition and sales.

Compliance Risks and Solutions for Slack 

Compliance Challenges of Slack

Slack seamlessly connects interdepartmental teams and financial professionals from across the globe. While Slack has revolutionized digital collaboration, partnerships, and account management within the banking sector, it also presents challenges to banking compliance.

Every digital collaboration strategy needs to address these challenges. Banks must comply with the latest security rules and compliance regulations to avoid FDIC penalties. The FDIC can charge over a million dollars a day to banks that knowingly violate fiduciary duties, customer privacy, data breaches, and more. As a result, it’s vital that compliance departments treat Slack just like any other tool used for internal or external communications, putting rigorous processes and policies in place to mitigate the risks involved.

Despite enterprise-grade level security,  Slack can hypothetically expose banks to security compliance risks; especially, the leaking of proprietary information, sensitive data, passwords, investor data, and future partnerships. Internal and external hacking is another concern for banks that use Slack.

Slack is an indispensable tool for agile workflow, but some banks are still reticent to incorporate it because of potential security risks. Fortunately, there are several ways to mitigate and reduce the risk of Slack use.

Slack Compliance Concerns and Solutions

Bank and other FinServ compliance departments ensure that departments, operations, and clients themselves are compliant with SEC, FDIC, and other industry regulations. Slack's security challenges are similar to those presented by other digital collaboration tools, social media accounts, and email.

Slack allows high-level clients and investors to interact and exchange documents with bank executives; however, it's difficult to know if these exchanges comply with banking regulations. How do you know if a client is using the bank to engage in unscrupulous activities?

Interdepartmental compliance issues are another concern. What's to prevent departments from engaging in unethical behavior that violates regulations? The same applies to compliance surrounding communications with external parties, partners and investors.

Here are more solutions to prevent Slack from turning into a security nightmare:

Monitoring Digital Collaboration in Banking

Monitoring is essential for Slack compliance. While banks can't monitor the private correspondence between employees on their personal social media DMs and email accounts, they can monitor exchanges between users on Slack.

As is the case with email, there is a risk that social media channels and enterprise collaboration platforms will be used to share sensitive company/personal information. For this reason, it’s important that organizations monitor these channels to prevent data loss/leakage.

These monitoring capabilities don't suggest that bank managers should be snooping in on every private DM. Instead, companies should be leveraging data loss prevention (DLP) solutions that automatically flag the sharing of sensitive information in Slack. This can include credit card numbers, account numbers, home addresses, and telephone numbers.

Monitoring can also be simplified through keyword libraries. Instead of entering multiple flagged words/numbers, users can select pre-canned text patterns that instantly add large sets of words/characters.

Compliant Recordkeeping of Communications 

As with other forms of communication, like email and text messaging, banks are expected to keep detailed records of messages sent and received by regulated employees through Slack. 

This means that companies must implement some form of enterprise archiving solution that not only collects and preserves Slack content, but also makes it easy to search, export, and share with regulators. Although platforms like Slack typically offer their own built-in archiving capabilities, these are not ideal, since they do not offer legal and compliance teams easy access to records. Moreover, exporting and submitting these records during an audit can be difficult without a solution that provides exports in user-friendly formats like PDF and CSV.

Even though regulations might only require that the communications of regulated employees be collected and preserved, it’s usually advisable that the communications of all employees be archived, since this ensures that legal and compliance teams will have access to any and all records they might need for an internal employee matter or external case.     

Awareness and Action around Harassment

In any modern workplace, stringent measures must be taken to ensure that shared environments are safe, respectful and free of discrimination. This applies equally to the digital realm of Slack. 

Slack administrators can boot users instantly from Slack if they suspect any behavior that puts the bank's security at risk; this also includes online harassment of other employees, sexual harassment, and discrimination.

Actively monitoring for certain phrases, wording and language can help to reassure employers and employees alike that the implications of harassment and discrimination are being taken seriously. If accusations arise, Slack has the potential to provide concrete evidence of any wrongdoing (assuming that sufficient archival measures have been taken.)

Leverage Slack’s Enterprise Features

In order to drive adoption in large enterprises and regulated industries like banking, Slack has created a comprehensive and sophisticated suite of identity management, security, and governance features

The company also offers Slack Enterprise Grid, which is designed specifically with large organizations in mind. Instead of creating one Slack instance within a company, Enterprise Grid connects multiple interconnected workspaces across a company. 

These features make it much easier to manage and secure Slack within a large organization — but they obviously only work if they are properly implemented. So in order to minimize the risks associated with Slack, organizations should make use of these features, even if implementation seems pricey and complex. Enterprise Grid, for instance, is more expensive than the “Standard” or “Plus” tiers of Slack, but the cost is well worth it.

Create a Slack Security Policy

Like an official social media policy, banks should create clear Slack policies that prevent the transfer of highly sensitive data, FDIC prohibited activities, security breaches, and harassment. Banks should consider enterprise mobility strategies with device destruction protocols that prevent further cybersecurity threats when employees leave the company.

A Slack policy must include security protocols for channel etiquette, account creation and termination, private channel discussions, channel creation, calls and video conferencing, and file attachments. The last thing banks need are hackers holding their sensitive private conversations for ransom.

Exchanging passwords, credit cards, sensitive customer data, bank data, account data, proprietary data, and infringing on intellectual property should be strictly prohibited on Slack.

A bank's compliance department and IT team must work collaboratively to ensure that Slack security protocols are being followed company-wide.

Access Slack on a Private Encrypted Network

For added security, Slack should only be accessed from a secure, private, and encrypted network. This will limit Slack access to specific users and prevent others from logging on. These networks would require a separate password to access the network.

Banks can also set up secured private networks for remote employees. They would need to log onto a remote desktop software with a password and connect to a work computer. Banking IT teams can restrict remote work computers to one user only to prevent security threats.

Take Slack Compliance to Another Level

As banks and financial institutions scale for growth, more security concerns arise. Advanced solutions are needed for digital collaboration compliance on a wide scale, especially as communication between internal and external parties increasingly moves into the digital realm.

An enterprise collaboration solution for risk management monitors and limits Slack compliance risk, so banks can focus on growth and clients. These solutions are vital for compliance audits, preventing and/or monitoring for sensitive data loss, streamlining early case assessments, and mitigating legal risk.

Enjoy the Benefits of Slack for Banking

Digital collaboration in banking is transforming interdepartmental productivity, strategic partnerships, and company growth worldwide.

Enjoy the benefits of Slack without the compliance risk. Use this guide to successfully integrate Slack and discover digital collaboration solutions that can help.

Want to learn more about Slack? Read our blog post, 7 Ways to Mitigate the Legal & Compliance Risks of Slack.

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George van Rooyen
George van Rooyen
George van Rooyen is the Content Marketing Manager at Pagefreezer.

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