Goldman’s messaging service under scrutiny

A New York regulator is asking questions about a new electronic messaging service expected to be used by banks and other financial institutions — also known as Wall Street’s new WhatsApp for business.

In a letter sent Wednesday, the Department of Financial Services ( DFS) asked Symphony Communication Services for information about the communications system’s data- deletion, encryption and open- source features.

“As you may know, banks have a legal obligation under New York law to retain records of their operations,” Anthony Albanese, acting superintendent of the New York financial regulator, wrote in the July 22 letter to Symphony CEO David Gurle.

Albanese said he would seek similar information from banks under his watch, including Goldman Credit Suisse, Bank of New York Mellon, and Deutsche Bank.

The questions about Symphony — seen as a rival for the popular Bloomberg terminal chat service — follow financial scandals in which investigators uncovered instant messages and electronic chat room messages showing traders from several banks manipulated the foreignexchange currency market and a major financial benchmark.

Symphony is expected to roll out its service next month.

Albanese’s concerns include how banks will ensure that Symphony- created messages will be retained, whether the users will data- deletion capabilities and “whether their use of Symphony’s encryption technology can be used to prevent review by compliance personnel or regulators.”

Symphony is the brain child of Goldman Sachs, developed after financial institutions learned in 2013 that Bloomberg News reporters had secret access to client log- in data on Bloomberg data terminals — the electronic communications tool used by many-financial professionals.

Bloomberg cut off that access after an internal investigation.

Still, Wall Street backed the new service, which has since attracted some $ 70 million from more than a dozen firms.

“Symphony is built on a foundation of security, compliance and privacy features that were built to enable our financial services and enterprise customers to meet their regulatory requirements,” the company said. “We look forward to explaining the various aspects of our communications platform to The New York Department of Financial Services.”