An Archiving Call for BlackBerry Texting

By Shane Kite, Securities Industry News

February 4, 2008

Text messaging, or texting, may be spreading like wildfire, but many securities firms have long banned its use for business-related purposes--this despite the fact that regulators have only recently said that archiving of such messages is required. With new regulatory mandates and a continued push from some broker-dealers, vendors who had previously focused on other areas of electronic communications are turning their attention to texting on handheld devices.

The Financial Industry Regulatory Authority's (Finra) December guidance on the review and supervision of e-communications explicitly included, for the first time, text messages--as well as e-mail and IMs--sent over handhelds (Securities Industry News, Jan. 7). The National Association of Independent Broker-Dealers had argued in a July letter, when the proposed guidance was out for comment, that texting was "merely a convenient substitute for voice communication" that "should not be classified within the definition of electronic correspondence." Finra, however, held that such messages must be archived and reviewed.

Gwava, a Montreal-based vendor known for software that supports Novell's Groupwise e-mail management system, in December released a product that archives text messages sent from Research in Motion's (RIM) BlackBerry handhelds. The solution, Retain for BlackBerry Enterprise Server, is installed at the server level, where it captures and stores short message service (SMS) and PIN-to-PIN messages.

The latter allow one BlackBerry user to send text messages directly to another using the personal identification number, or PIN, assigned to each device, rather than an e-mail address. Such messages have been anathema to compliance personnel because, historically, they bypass server-level storage and archiving tools, placing firms at risk of not meeting their obligation to retain business-related communications.

Nonetheless, some broker-dealers have chosen to use PIN messaging for everything from communications during disasters or network outages to secure, real-time, unconflicted coordination of IT or deal staff during business projects. "Most BlackBerry users assume PIN-to-PIN messages are untraceable," says Richard Bliss, VP of marketing at Gwava, but that isn't the case.

Israeli vendor Onset Technology offers PIN-to-PIN and SMS archiving for BlackBerry through its MetaMessage product, introduced in 2003. But client software must be installed in each device, as is the case with New York-based CommonDesk's PINcushion system.

Steve Koontz, Onset's director of marketing, says the concept behind MetaMessage is to ensure that text messages can be stored, so there's a compliant communications backup when e-mail systems go down. Administrators can configure MetaMessage to record all SMS and PIN messaging at the server level when the network is up, and at the device level when the network goes down.

Though Gwava's Retain captures BlackBerry text, PIN-to-PIN and SMS messages, and makes them searchable using a desktop utility, it does not archive e-mail, except for firms that use GroupWise. Onset's MetaMessage also is aimed at BlackBerrys' non-e-mail text functions. Most firms already have e-mail archiving solutions for the handhelds.

Waterloo, Ontario-based RIM's BlackBerry Enterprise Server links enterprise e-mail and messaging systems, including Microsoft Exchange, IBM's Lotus Domino and GroupWise, to BlackBerrys using company networks.

Several top investment banks have asked for demonstrations of Retain for BlackBerry's capabilities, says Bliss. MetaMessage is already deployed by several major investment banks, according to Onset's Koontz.

Half a Handheld

"Many firms are simply turning off the" PIN texting capability, Bliss says. But then, "why have a BlackBerry? They're losing a lot of the functionality that sets this product apart. For the brokerage houses, it's security--their IT people need to be able to track and report, to know that they're compliant. We can track the usage as well, to know who the worst abusers of the devices are."

"Smartphone" text messages can also be captured by asking phone carriers for logs, or via device functions. But many firms want more control, mainly through in-house servers, to ensure compliance.

San Diego-based Akonix Systems, which provides instant messaging security and compliance solutions and blocks peer-to-peer applications, does not archive PIN-to-PIN or text messaging, but "we've been looking at it," says VP of marketing Don Montgomery. The recent Finra guidance "was sort of a catalyst for us in our product planning. Our business plan is to be able to manage all streams of electronic communication, even wikis and blogs, the latter of which is currently a very manual, siloed process."

Fortiva doesn't have a solution specifically aimed at PIN messages, but it can store them, as well as BlackBerry e-mail, if the Blackberry Enterprise Server is configured to retrieve the data and send it to Fortiva's hosted storage platform, says Rick Dales, a product management VP at the Stamford, Conn.- and Toronto-based company.

"We focus on e-mail because it's the biggest part of the problem," Dales explains. "I almost never see firms allowing the use of text messaging for business purposes. People tend to abbreviate things, and it's very easy to misconstrue information, which can lead to problems down the road. Until recently, firms haven't really given it much thought."

Yet blocking internal texting doesn't stop messages that originate from outside a company. Adds Dales, "We are at the beginning of seeing people trying to formally lock that down."

New Federal Rules of Civil Procedure may cause further consternation, as firms are being asked to produce e-communications in lawsuits quickly. "SMS is definitely going to require more cooperation from the carriers to make it so that compliant archiving can take place," says Matt Smith, president of Torrance, Calif.-based LiveOffice.

LiveOffice offers products that archive, review and report e-mail and IM, as well as BlackBerry Enterprise Server hosting for independent broker-dealers that are not self-clearing. The company's AdvisorMail system does not yet archive text messages.

Orchestria Corp., which archives BlackBerry e-mail via agents that reside on mail servers such as Outlook, does not archive PIN-to-PIN messaging, because, according to Orchestria spokesperson Ann Dalrymple, "customers have not asked for it." David Cohen, SVP of industry solutions at New York-based Orchestria, adds, "It is still best practice in the industry to disable the PIN-to-PIN feature."

Orchestria concentrates on post-event analysis and indexing, and partners with companies like Symantec Corp. and EMC Corp. for message storage. Compliance officers can use Orchestria tools to index messages according to context and by keywords, functionality that vendors such as Fortiva also offer. Certain messages are flagged for possible review.