Barclays mistakenly sent client data to German debt agency
(Bloomberg) -- Barclays Plc mistakenly revealed client names and trading information to the German Finance Agency earlier this year.
In an email to affected customers last week, the bank blamed “human error” for compromising their confidentiality after it sent the wrong file to the German debt agency in February, according to people briefed on the matter, who asked not to be identified because the communications were private. The trade data, which concerned transactions in January, is sent every month and client information is supposed to be kept anonymous, the people said.
Alexandra Beust, chief spokeswoman for the German agency, confirmed the incident and said the organization immediately alerted Barclays and deleted the data. The agency doesn’t see the need to change its procedures based on a one-time event, Beust said. A spokesman for Barclays in London declined to comment.
“This was some client information that went to a regulator, this was not the core data systems of the bank being breached,” Chief Executive Officer Jes Staley said when asked about the incident on a call with reporters on Friday after the bank announced earnings.
The incident is a blow to Barclays’ reputation because client confidentiality is sacrosanct in the investment banking and trading businesses. Human error is a threat to bank’s data security as firms also try to protect against cyber attacks and wrongdoing like employee thefts.
Wells Fargo & Co. is facing questions from U.S. financial watchdogs after mistakenly providing wealthy customers’ data to an attorney as part of a lawsuit, Bloomberg News reported this month.
London-based Barclays has been under fire for other compliance issues this year, most notably when CEO Staley had to apologize to shareholders in May for trying to unmask a whistle-blower in contravention of the bank’s rules guaranteeing anonymity. He and other executives are currently being interviewed by the U.K. Financial Conduct Authority and could face penalties ranging from a fine to losing his job.
Barclays has pledged to spend billions of pounds to digitize and automate its processes to cut costs, reduce human error and make it harder for market-rigging scandals to re-occur.
“We continue to invest very heavily in our compliance function and controls framework, and feel very, very good about the progress there and improvements we’ve made,” Finance Director Tushar Morzaria said in response to questions about whether the bank was tightening its procedures after the incident.
Barclays was the ninth-biggest dealer of German government securities in the first half of the year, according to the German Finance Agency’s website. A primary dealer buys sovereign bonds from the state in auctions and sells them on to other investors.