Regulators in the US intend to impose approximately $1bn in fines on a number of banking groups including Deutsche Bank, Morgan Stanley and UBS over the use of personal messaging apps for business dealings.

The banking group, which also include Bank of America, Barclays, Citigroup and Goldman Sachs, are closing negotiations to pay around $200m each to the authority.

The banks accepted that their staff have used personal messaging apps, for example WhatsApp, to conduct business discussions, violating regulatory norms, reported Financial News citing sources familiar with the development.

Other entities such as Jefferies and Nomura are also in talks with the authority to reduce their share of fines due to the size of their businesses.

The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) may announce agreements with these banks by the end of next month.

However, spokesperson from SEC and CFTC refused to give any statement regarding the matter. Representatives from the banks also refused to comment.

During their investigations, the regulators reviewed the ways traders and brokers used encrypted apps, including WhatsApp, to talk about investment terms, meetings with clients and other business deals.

The current SEC and CFTC regulations mandate brokerage companies to preserve and observe their staffs’ written communications. Keeping a record of such communications help regulators to check whether the firms comply with investor-protection laws.

Use of WhatsApp, Signal and other related apps give preference to priority over privacy. Message trails of such apps can be deleted automatically after some time or after giving a read.

Regulators find it difficult to track such practices, which became more frequent during the initial days of the pandemic when people started working from home on a full-time basis.

According to Mark Berman, a regulatory consultant at CompliGlobe, which provides services to overseas firms that are required to follow SEC norms, using personal and business devices for a bank’s commercial purpose could attract hackers to steal valuable business secrets.