Financial firms turn on secure IM

[InfoSec News <isn () c4i org>]

http://news.com.com/2100-1023-878439.html

By Troy Wolverton 
Staff Writer, CNET News.com
April 8, 2002, 4:50 PM PT

Several leading financial services companies signed up for an instant
messaging service Monday designed to provide security and allow
control over the information sent to clients and employees.

Salomon Smith Barney, J.P. Morgan Chase, Merrill Lynch, Credit Suisse
First Boston, Goldman Sachs, Lehman Brothers, Morgan Stanley and UBS
Warburg have begun using the Communicator Hub IM service, creator
Communicator announced Monday. The companies have each signed
multiyear, multimillion-dollar contracts to license the service for
their employees and institutional clients, said Leo Schlinkert, chief
executive of Communicator.

"Companies are being besieged by their employees who want instant
messaging to communicate with their fellow employees and, more
importantly, with their customers and partners," Schlinkert said in a
statement. White Plains, N.Y.-based Communicator has a small
investment in SecuritiesHub, a consortium owned by the eight financial
services companies that signed up for the service Monday.

Overwhelmingly popular with consumers, instant messaging has also
gained increased acceptance with business users. Companies such as
eBay have tested IM services to communicate with customers. Microsoft
and Sun Microsystems announced plans last year to develop IM products
targeted at business customers.

Although many employees run AOL Instant Messenger (AIM) or Yahoo
Messenger on their office computers, companies have been concerned
with the programs' technical, security and policy issues, with some
financial institutions banning the use of instant messaging for sales
or trades. According to a survey released last month by Osterman
Research, 23 percent of companies block IM communications on their
servers. Among companies that have settled on an IM standard, 65
percent chose IBM's Lotus Sametime technology.

Founded in 1999, Communicator has thus far focused on the financial
services industry, but it plans to offer its service to the energy,
chemicals and pharmaceuticals industries.

To use the service, clients install Hub IM software on their PCs. The
software comes in two forms: a Java-based stand-alone application and
a non-Java version that runs within an Internet-connected Web browser.  
Traffic is routed through Communicator's computers. The service
secures messages by sending them through SSL (Secure Sockets Layer), a
transaction security standard that enables commercial transactions to
take place online.

The Hub IM also allows companies to tailor the material transmitted
and have greater control over the information. For example, a mutual
fund company could use the service to contact both J.P. Morgan Chase
and Merrill Lynch, but neither of the financial services companies
would be able to tell by the information that they had the same
client. It also allows a company to have a common address book rather
than requiring employees to create their own unique "buddy lists," and
it gives the company more control over archives of IM conversations.

Salomon Smith Barney has been testing a beta version of Communicator's
service since last summer and began using a full release of the
service early last month, said John Casaudoumecq, managing director of
Salomon's global fixed income e-commerce division. Some 3,000
employees are using the service, and Salomon plans to expand the use
of the service from its fixed income division to other areas in the
company, Casaudoumecq said.

Salomon has also been encouraging clients to adopt the service, he
said. Salomon likes the service because it meets the company's
security standards and is flexible enough to allow the company to use
it as it sees fit, he said.



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