Deutsche Bank AG will cut bonuses for staff who inappropriately used messaging services for business communications as the repercussions from a sweeping U.S. Probe ripple across the industry.
Employees whose usage of unauthorized devices or messaging apps was found to be in particularly severe breach of policies will see a substantial reduction in variable pay, people familiar with the matter said. The cuts affect pay still to be awarded for last year, the people said, asking not to be identified discussing private information.
Deutsche Bank is among several global lenders that have paid fines of more than $2 billion to the Securities and Exchange Commission and the Commodity Futures Trading Commission to settle an industrywide investigation into whether bank staff made use of unauthorized communication channels. The German lender’s top executives took a pay cut last year over the issue, and the bank has rolled out new software as it seek to address the issue.
“We have a consequence management framework in place,” Deutsche Bank said in a statement. “Depending on the quantity and quality of a records retention violation this will also impact performance evaluation, individual compensation and promotion, and can lead to disciplinary measures.”
Barclays earlier on Thursday said that it docked 500 million pounds from its 2022 bonus pool, in part to punish staffers involved in WhatApp messaging. The British bank was also among the institutions that settled with U.S. Regulators last year.
Industry rules have long required banks to archive business communications to ensure regulators can check them if necessary at a later stage. But the rapid spread of private messaging tools outside of banks’ control has undermined that effort.
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