An external review of Bloomberg’s data policies and procedures has recommended that stronger measures are needed to ensure journalists are unable to view client information through its financial data terminals.
An external review of Bloomberg’s data policies and procedures has recommended stronger measures be put in place in order to ensure journalists are unable to view client information through its financial data terminals.
Two separate reports were released by Bloomberg on Wednesday detailing investigations into corporate practices at the firms, following claims by banks such as Goldman Sachs that journalists had been able to view certain user information.
It was reported in April that some Bloomberg reporters had used a terminal function to find a subscriber’s personal contact information, monitor whether a subscriber was logged on and read discussions between subscribers and customer service. Information on individual trades was not believed to have been available however.
Bloomberg subsequently hired former IBM CEO Sam Palmisano to conduct a review of Bloomberg's privacy and data standards, as well as commissioning two examinations into its internal data policies.
One of the reports was led by law firm Hogan Lovells and regulatory compliance firm Promontory Financial Group looked at security and privacy policies. The other was conducted by Clark Hoyt, previously Editor-at-Large at Bloomberg News and a former Public Editor of The New York Times.
The Hogan Lovell review involved the examination of more than half a million news stories, hundreds of employee interviews and 230,000 tests of client data systems. There was also examination of 350 documents, including internal policy manuals, policy notes, training guides and client visit logs.
In line with the 54 recommendations made as part of the Hogan Lovells report, Bloomberg has now taken a number of actions to improve data controls and compliance. This includes hiring a chief risk and compliance officer, in addition to the client data officer compliance recruited to the firm in May.
A role-based permissioning framework is to be introduced, with a centralised access control team overseeing access privileges to restricted data, while the company is also enhancing its systems that monitor for unauthorised access.
Furthermore Bloomberg journalists no longer have access to client terminal functions, known as UUID and ADSK screens, which provide information such as private email address and log-in history. Journalists also no longer have access to Bloomberg’s anonymous chat rooms.
Commenting on the Hogan Lovell's report, Sam Palmisano said that he believed adequate measures had been made to improve Bloomberg's internal data policies.
“The report issued today is thorough, objective and comprehensive," he said. "Bloomberg’s leadership recognised the need for a more comprehensive set of policies and procedures. They acted quickly to enhance their existing structures and put more resources behind this critical priority.
"Based on my own observations, I support the report’s conclusion that Bloomberg currently has appropriate policies and controls in place.”
A number of recommendations made in the Hoyt report were also accepted by Bloomberg, largely centering around newsroom standards, with the firm pledging to ensure greater separation between the news and business arms of the business.
Commenting on the release of the two reports, Bloomberg CEO and President Daniel L. Doctoroff said: “We know we needed to evolve, and we have learned from our mistakes. We are already implementing many of the recommendations we received.
“Most importantly, we have carefully listened to our clients and other constituencies, and their suggestions are helping make us a better partner.”
However Ovum analyst Rik Turner said that despite the actions taken to tighten its data policies, business for Bloomberg’s terminal platform, which has over 300,000 subscribers, is likely to see some adverse effects.
“When Bloomberg had what you might term its “NSA moment” earlier this year, it came against a backdrop of dissatisfaction on the part of some clients with the $20k annual price tag for each terminal,” he said.
“The discontent caused by the client data snooping by Bloomberg journos was clearly not going to result in a wholesale walkout, but I suspect that, along with the price issue, it may have spurred a number of customers to look again at alternative suppliers of market data and other services they currently get from Bloomberg.”