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April 30, 2003

Instant Messages Are a Hit

By Peter Chapman

Steve Pikowski, head of global web development at Citigroup Equities, agrees. "If you are multi-tasking, this is a great way to communicate," he said. "You'll see traders and assistants on the phone and IM-ing at the same time."

Citigroup, formerly Salomon Smith Barney, is one of five brokerages signed on to use Communicator's Hub IM. Citigroup's equities division joined the consortium, says Pikowski, because it is "client-focused" and the technology is "client-driven."

Many of Citigroup's largest customers are patched into Hub IM. Their employees are accessible via the directory. A total of 1,600 staffers in Citigroup's equities and fixed income divisions use Hub IM; 800 of them are active. "The community is pretty big," Pikowski said.

On Wall Street

Citigroup's traders also use AOL and Bloomberg. The brokerage will use any system its clients use, given compliance compatibility, but prefers Hub IM because it is focused on serving Wall Street. Pikowski says it worked with AOL to build in the necessary compliance and firewall functionality.

Another Hub IM user is critical of AOL. "I'm not sure AOL is enthusiastic about our community," this source said. "Hub IM was able to come in and build the pipes and sewers and the compliance retention policies. This is really their business. With AOL, we felt like it was something ancillary."

At Citigroup, traders are not restricted in what they can say in their messages, but know their conversations are subject to auditing. "They are aware it is monitored real-time by an eye-in-the-sky compliance person," Pikowski said. "We are very concerned about reviewing messages in real-time so we get downloads from Hub IM daily as well."

Traders cannot, however, transmit trade instructions over IM. "It's something we're interested in, but that takes on a whole other dimension," Pikowski said. "We are grappling with that issue along with every other major broker dealer."

Citigroup is cautious. "You want to first test drive the product," Pikowski added. "Make sure it works. Make sure you have all your compliance policies in place. Make sure you are protected. We're apprehensive for the obvious reasons."

Steve Lichtman, a marketing exec at Communicator, maintains Wall Street is turning to firms like his precisely because public networks like AOL come up short in compliance and security.

"The biggest trend in IM this year is the idea of control," Lichtman said. "Firms want to know: Who is auditing these messages? Who is giving me reports on who is talking to whom? AOL doesn't provide that sort of thing."

Communicator will archive instant messages and make them available to its customers. However, it does not give users the ability to do real time monitoring and alerting. To that end, it recently entered into a partnership with IMlogic. "It's a value-added extension," said Lichtman.

Spoofing is a fear as well, adds Lichtman. With AOL, consumers are able to disguise their identity with aliases. It's not prohibited. But, as with corporate e-mail systems, the practice would not be acceptable with corporate instant messaging. Messages must be delivered to the authorized person.