STEMMING OUT of software it has developed to police mobile web content, Adaptive Mobile is set announce clients for a system which spies on traders working for major financial institutions.

The objective is to prevent traders from passing information to friends or relatives so that they can make illegal trades. The big financial houses have realised that there is already a potential hole in their security systems.

It is possible to pass information on via mobile phone which would by-pass standard, already-deployed security procedures such as recording phone calls and capturing traders' web traffic.

It's not just text messages that could be used to leak confidential data, it's picture messages (MMS) and WAP traffic, too.

Many financial institutions already have to archive email messages by law and now they need to do the same thing for messages sent via a mobile phone – including IM (Instant Messaging) systems like Windows Live and Google Talk.

What Adaptive Mobile has done is to adapt the technology it has developed for parental control and which also enables mobile operators to ensure that minors don't obtain adult content via their mobile phones.

The INQ asked Adaptive Mobile's CEO, Lorcan Burke, how his company can police information sent as a picture message? It should be easy for a trader to write a message on a piece of paper; photograph it with a cameraphone; and then forward it as an MMS/picture message.

Burke explained that the company's software routinely scans images for URLs and the like in order to protect minors and adapting this to watching City traders photo messages wasn't that difficult.

He also pointed out that while the system only monitors mobile phones given to employees by their employers, it doesn't matter if traders use their own personal phones.

Using a personal phone constitutes a very different sort of crime and therefore lies outside an institution's realms of responsibility. In other words, if traders are caught with their own phones they can be fired anyway.

Adaptive Mobile says this product is proving of interest not only to those based in the City of London but to those situated in New York and Dubai's stock exchanges, too.

Given the damage a 'rouge' trader recently did to Societe Generale's reputation, this is a very timely announcement indeed. µ