The Financial Services Technology Consortium (FSTC) has embarked on a records management initiative to help financial institutions manage electronic data, including unstructured data such as e-mail, instant messaging and user-generated content. What differentiates the FSTC (New York) undertaking from other industry initiatives is its focus on technology, according to Mike Versace, managing executive, FSTC.
Versace explains that the FSTC project will look beyond business processes and focus on technology challenges, including the industry's lack of integrated and well-designed records management solutions. FSTC will coordinate its efforts with other industry groups, such as the American Bankers Association (ABA), he says.
Citigroup's (New York, N.Y.) Richard Gomes, SVP of IT and risk management, and one of the project participants (the other participants had not been named at press time), says records management is a "foundation competency" that enables the rest of the business to optimize efficiency. "Records management helps you understand the information you own, what controls you need to put in place, and the legal and regulatory requirements surrounding retention of this information," he relates. Once an institution understands this, it then can streamline its information-handling processes, Gomes adds.
While the benefits of the records management initiative include improved efficiency, the single biggest benefit is risk mitigation, Gomes asserts. "Whether inadvertent or not, mismanagement of information presents a large franchise risk to financial institutions," he says.
One of the FSTC's first orders of business will be to define unstructured data. "Everyone has an idea of what unstructured data is," relates Gomes. "Although we all can agree when we see it, we don't have a well-formalized definition."
The FSTC's definition, Gomes continues, will include criteria important to regulators. "The courts have to agree that the definition of unstructured data and the methodologies we apply to manage that data are credible," he explains.
Intelligent Records Destruction
Another important aspect of records management to be addressed is "continuous document destruction" based on document classification and how the documents are used, notes the FSTC's Versace. "This is not about just keeping everything but keeping only what you need," he says. "To do this, you need to add intelligence into your record management system."
The records management initiative will be completed in phases, according to Roger Lang, managing executive of FSTC's Security and Infrastructure Standing Committee. Once the FSTC participants agree on the definition of unstructured data, "We'll be asking questions such as: What is the highest priority? What are the most sensitive documents for all stakeholders -- including external regulators, internal management, lines of business and clients?" he explains.
Lang notes that the FSTC will analyze emerging industry standards, such as XML, to determine whether or not it should endorse them. The FSTC also plans to test vendor solutions to ensure that they scale and perform as advertised.
Ultimately, the FSTC will educate the financial industry on records management best practices, Lang says. But as records management is a moving target, he continues, "We're not only looking at what is out there today, but how emerging technology will impact records management tomorrow."