Oil traders may be the last people to realize they don’t need Yahoo

Yahoo’s instant messaging service has been used by oil traders to issue orders and chat about commodities for years. While IT departments have often struggled managing access to what is effectively a consumer messaging platform, banks have continued to use the service. That’s about to change in August.

The Financial Times reports that Yahoo is changing its Messenger service to prohibit chat monitoring. Financial regulations stipulate that any trades or orders must be monitored by a participating bank and be auditable for compliance and regulatory reasons. It’s not clear why most of the financial industry’s oil traders flocked to Yahoo Messenger in the first place, but the industry as a whole uses a variety of different chat systems from Bloomberg, Reuters, and others to communicate between banks and traders.

Yahoo’s Messenger updates include new options to “unsend” messages, a big drawback for banks looking to see how an order was placed. Yahoo is also planning to encrypt Messenger communications, making it much harder for banks to log conversations. The Financial Times reports that a number of rival companies are now trying to secure contracts to provide messaging systems to banks ahead of the August 5th changes to Yahoo Messenger.