LeapXpert nets $22M to track employee chats for compliance

LeapXpert, which makes software for banks to use external messaging software, raised $22 million in additional Series A funding. Rockefeller Asset Management led the round.

Why it matters: Failure to monitor employee communications on unauthorized messaging apps— including WhatsApp — have cost major banks over $2 billion in fines just in the U.S. alone.

Context: Under SEC and CFTC rules, brokerages must maintain and monitor employees' written communication in case investor protection laws are broken.

• That became more challenging when bank employees were forced to work from home during the pandemic, and increasingly turned to external, encrypted messaging apps.
• Morgan Stanley reportedly imposed individual fines of over $1 million on some bankers for using external messaging apps.
• LeapXpert integrates with platforms including WhatsApp, WeChat, and Signal, creating a record of communications. It also allows banks to prevent unauthorized messages or attachments from leaving the company.

Of note: LeapXpert isn't a total solution to Wall Street's messaging problems.

• It doesn't prevent a banker whose main concern is maintaining privacy from creating a non-bank-sanctioned messaging account.