As regulators continue to ratchet up the pressure on the financial services industry, it is more critical than ever for banks to have access to current and historical data. But, as regulators require more and more granular levels of detail, traditional storage options no longer are sufficient. By implementing an information life-cycle management (ILM) strategy, however, banks can tap automated solutions to prioritize and store critical data in cost-effective, highly accessible tiered repositories.
Whether banks are collecting data to facilitate customer transactions, improve business operations, create new products or respond to market trends, they are swimming in volumes of actionable information. And the data comes from various disparate sources. "There is an avalanche of data due to sources like electronic check images, EFT [electronic funds transfer] transaction records, mortgage applications and so on," relates Richard Winston, a Dallas-based senior executive in Accenture's financial services practice. "As this data piles up, banks face a variety of retention requirements."
For example, within the next 10 years, as many as 34 billion check images could be presented for payment, according to Paul Abbott, director of industry solutions for worldwide banking and finance, Mobius Management Systems, a Rye, N.Y.-based provider of content management solutions. "Yet, states are requiring banks to keep the original data on file," he says.
While "the length of time required to retain data is governed by regulations," Abbott continues, "market demand is challenging banks' storage operations as well." Consumer information, such as account statements and customer transaction histories, are taking up large amounts of storage, he explains. Similarly, internal reports also are filling data repositories across the industry.
To limit the storage burden, banks must decipher how long to keep this information. "Banks may not need certain pieces of information this year, but 17 years from now regulators may want to see this," Accenture's Winston says. "They need a business strategy to respond to these potential requests."
And banks need not look far for motivation to ensure their retention strategies meet regulators' demands. In May, for example, Morgan Stanley agreed to pay $15 million to settle Securities and Exchange Commission charges stemming from the company's failure to produce e-mails relevant to an SEC investigation.
Often, in such cases, "It is not that the information did not exist," contends Bruce Backa, chief executive officer of Nashua, N.H.-based NTP Software, a provider of storage management solutions. "Rather, their environment is so big and contains so much information that they could not find what they needed."
Similarly, banks are challenged by how to cost-effectively store information and easily retrieve it when needed. "There is a clear challenge," Backa continues. "The business wants all data available in real time, ... [but] banks still cannot afford to keep all data in real-time formats."
More important, banks are struggling with how to get ahead of the problem. "Banks are in need of a strategy that keeps them in charge of their destiny -- not just react to the needs of their user community," says Backa. "There are costs involved, and banks often underestimate the cost on their back end. For example, banks could spend close to $3 million in response to a $1 million lawsuit," he adds. "They need to manage their storage costs and somehow understand and prepare for their future needs."
While the challenge is daunting, banks have begun to address the problem, adopting information life-cycle management strategies and automating their back offices by adding hardware and software solutions that store mission-critical information in tiered storage repositories. ILM manages the flow of strategic information from its creation and initial storage up to the time it is obsolete or ready for deletion. Called a framework that assesses the business value of data, ILM enables banks to prioritize data and move information to different tiers.
- Page 2: Enter: ILM
- Page 3: You've Got Stored E-Mail
- Page 4: A Single Archive Is Key
- Page 5: Continuing Evolution