Almost all banks today generate unimaginable quantities of data, making the financial services industry one of the most data-intensive sectors. Add to this high amount of online data created by banks and customers alike through business processes, customer interactions, and financial transactions, and what we get is trillion bytes of data that needs to manage. As a result, financial services are perhaps one of the most excessively regulated industry, requiring all its data to be monitored in order to stay compliant, protected and competitive.

Financial Software Development

Record keeping and archiving data, especially electronic data, is a key requirement for regulatory compliance for banks. Here’s a quick view of some of these regulations specific to the US:

  • FINRA 10-06 — Financial firms need to retain records of all social media communications

  • FINRA 11-32 — Asks that tweets and text messages be preserved

  • FINRA 11-39 — Banks have to retain, retrieve, and supervise business communication through work-issued as well as personal devices

  • SEC Rule 17a-3 & 17a-4 — A dealer or broker must preserve documents and records for three to six years

  • NASD 3010/3110 — Member banks must create a retention program for all correspondence involving registered representatives

  • Sarbanes-Oxley Act — Public companies must save all business data, including electronic for a minimum of five years

  • IIROC 11-0349 — All methods used to communicate, including social media, blogs and chat rooms, are subject to the IIROC Dealer Member Rules

  • [Applicable in European Union] Markets in Financial Instruments Directive (MiFID I & II)Financial advisors and corporate brokerage firms must record all electronic communications related to a trade, including archived email, social media, instant messaging, voice calls, and mobile communication. Records must be stored in a medium that cannot be changed or deleted and must be available to clients on demand.

So, what can a bank do when the amount of data they need to manage keeps growing over time and databases expand when new features are introduced? To avoid issues like slowdown of systems, heavy investments in additional hardware or large amounts of time required to restore a mission-critical backup, banks need an intelligent way to manage all that data.

A data archival solution is a great first step as it can easily help prepare responses to any compliance audit, litigation or information request for business data. Data archiving is the process of moving data that is no longer actively used but is still important and could be needed for future reference and regulatory compliance, to a separate storage device for long-term retention. The right data archiving solution can store all communication data in one central location for easy search, eDiscovery, and exporting needs. All transactional data, master and reference data as well as metadata is stored and can be retrieved easily on demand because data archives are indexed and have search capabilities.

Why banks must archive data?

  • The most obvious reason to archive all transactional and business data (electronic data included) is that it is mandated, and non-compliance has consequences.
  • Data leakage of proprietary data, customer data, transactional or confidential information, either intentionally or accidentally can have serious consequences and data archiving can help store it safely.
  • Data archiving also gives oversight by protecting the bank from insider trading, inappropriate financial advice, and imposing personal beliefs on a financial investment or trade as a financial fact. Oversight on employee communication data, coupled with an effective communication policy, will let bank employees know that everything they communicate is being stored and can be accessed for review, thus ensuring appropriate behavior.
  • Solutions that provide data monitoring, filtering, and read-only access give another layer of protection, by preventing inappropriate, sensitive, proprietary content from being accessed, shared or modified.
  • Data archiving improves system performance and reduces downtime by reducing the amount of activity that must be maintained. Once archived, the data can be deleted from the live system. This also reduces the load on the bank’s IT team.
  • With data being easily identifiable, banks can easily define, apply and govern data retention and disposition policies specific to each geographic region. They can also segregate access to that data so that only designated roles or locations can access data from specific users.

Most importantly, a bank’s archived data is an untapped source of actionable business insights that lie in the mass of historical data collected over the years. These insights can now be easily accessed helping banks become more efficient, compliant and competitive.

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About the author

Tamil Bharathi is the Client Advisor at Zuci. He specializes in advising and offering critical customer-centric solutions to new and existing customers for the best end-user experience. He is a fun person with a great sense of humor. Check him out at Tamil Bharathi.