Deutsche Bank: million euro fine due to Messenger use

Deutsche Bank is facing a fine of around 200 million US dollars in the USA. The reason for this is the use of messengers such as WhatsApp by employees. Deutsche Bank is thus in breach of regulations governing the archiving of internal written communications.

Archiving mandatory

The relevant supervisory authority has prescribed that all companies in the banking sector in the USA archive their internal written communications. This is intended to prevent violations of applicable law or make them traceable. With these regulations, the supervisory authority has reacted to the Libor scandal, in which several banks manipulated reference interest rates. The collusion took place via messenger.

In connection with the pandemic, the use of messenger apps such as WhatsApp has increased significantly within Deutsche Bank as well as other banks. This is problematic because messages sent and received can be deleted in many messengers – which means that archiving regulations cannot be complied with.

Deutsche Bank has built up reserves

In the second quarter of the current year alone, Deutsche Bank has built up reserves of around 165 million euros for legal costs or fines. According to the bank’s own statements, the funds are also being used to prepare for “regulatory[] investigations by the U.S. SEC and the CFTC regarding the use of unauthorized devices by employees and the company’s record-keeping requirements.”

The Securities and Exchange Commission has been investigating the use of messengers such as WhatsApp since last year. In total, fines of two billion US dollars are planned against a wide variety of major banks. In addition to Deutsche Bank, Bank of America, Morgan Stanley, Goldman Sachs and Citigroup are also affected.

According to a report by Bloomberg, Deutsche Bank already indicated internally at the beginning of the year that deleting WhatsApp messages was prohibited. Furthermore, the use of WhatsApp on Deutsche Bank company cell phones has already been prohibited since 2017. Furthermore, Deutsche Bank has developed software to record and archive all messages sent via messenger services.

Investigations also in Germany

German regulator Bafin is also currently investigating Deutsche Bank or its subsidiary DWS, which most recently announced it would invest in fiber-optic expansion in Germany, due to the use of private email boxes as well as Messenger services. Although there is no ban in principle in Germany due to the lack of archiving options, Bafin sees indications that transparency regulations may have been violated. However, it did not comment on the reason for or objective of the investigation.