Few instant messaging apps have made the headlines as often as Telegram Messenger over recent months. The latest is that a Spanish court has u-turned on its move to temporarily suspend Telegram nationwide, after media firms complained of intellectual property rights violations.

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The platform’s adoption by criminals was also spotlighted earlier this month in a damning FT piece ominously titled ‘Telegram: social media giant or new ‘dark web’? In the piece, Haywood Talcove, chief executive of LexisNexis Risk Solutions’ government division, makes the bold claim that Telegram is fast becoming the preferred social media space for ‘organised criminals’ and that ‘it is virtually the wild west’ on the platform.

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But it hasn’t all been bad press for Telegram – far from it. Anticipation has been growing over recent weeks around the messaging app’s potential IPO, with Telegram’s CEO Pavel Durov revealing the platform has surged from 500m actively users in 2021 to around 900m users today. Its growing popularity – whether driven by criminal activity or not – poses some very important questions for financial institutions globally, many of which do not yet know what Telegram is, let alone have a policy in place regarding staff use of the app.

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For readers less familiar with the hottest app on the block, Telegram is a cloud-based messaging platform like WhatsApp, but with a focus on privacy, features and flexibility. Users have the ability to create self-destructing ‘secret chats’, edit or delete sent messages, and even to share files of any type up to a titanic 2GB in file size. Beyond unearthing obvious difficulties surrounding firms’ messaging record-keeping requirements, several of Telegram’s unique features will be particularly alarming for businesses or authorities tasked investigating insider trading. Not only can users arrange for their entire account to ‘self-destruct’ at a given time, but they can also exchange messages anonymously, without knowing who the sender is at all.

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These features will undoubtedly have compliance professionals sweating and wrongdoers licking their lips. And the more headlines that appear around Telegram, the more sweating and scheming will surely take place. Financial institutions cannot afford to waste another minute with regards to their approach to Telegram.

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Firms ultimately have two options. Firstly, they could impose an outright ban on staff use of the platform. This, given the wide array of challenging features compliance professionals would be forced to contend with, wouldn’t seem a particularly overblown response. There is also the potential reputational damage associated with permitting staff to communicate on an app labelled by many as the ‘new dark web’.

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Alternatively, firms could look to deploy sophisticated communications surveillance technology – including mobile capture and trade reconstruction capabilities – to mitigate the risk of staff using Telegram. VoxSmart, for instance, has supported several large financial institutions in capturing and monitoring Telegram messages in recent years, and we remain vigilant around Telegram’s growth, should further support need to be rolled out to our clients in the future.

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While a ban may seem the most pain-free solution, there are considerable drawbacks that mustn’t be overlooked with this course of action. Most importantly, in the modern, digital landscape for investment markets, a financial institution’s client base has the ultimate say over how it communicates. While the overwhelming majority of clients – particularly in the banking sector – prefer to use more established messaging platforms like WhatsApp, peoples’ preferences change fast. Failure to accommodate these fast-evolving preferences risks damaging your relationship with clients, or worse, seeing revenue flee to the competition. Indeed, as firms compete for increasingly digitally native clients, being able to communicate in a way that makes their life easier is not only preferable, it is a commercial necessity.

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Employees’ communications preferences must also be considered. Ensuring staff feel empowered to use the platforms they feel are most effective for their role is essential, helping to drive efficiency, increase job satisfaction, and ultimately boost talent retention. Moreover, with Telegram offering users helpful functions like the ability to share files as large as 2GB, it is easy to see why the app may become increasingly popular in the workplace.

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Whatever approach to Telegram firms do decide to take, one thing seems certain: there is good cause to be wary of Telegram. Indeed, conversations must be had today – not tomorrow.