April 8, 2002 4:50 PM PDT

Financial firms turn on secure IM

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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It is so expensive
It is so expensive...
For small or medium network the perfect solution is serverless <a href="http://messenger.softros.com">secure IM</a> like this. it's easy to deploy and use and only $10.95 per copy...
Posted by sergiopj2006 (1 comment )
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