Paperless at Your Own Pace: The Hybrid Approach to Records Storage

March 6, 2012

As you assess your financial records management options, consider the advantages of a hybrid system that combines the best of several storage methods.

Here’s a statistic to get any records manager’s attention: The world’s data volume is doubling every two years. In fact, it’s estimated that we collectively created and replicated 1.8 zettabytes (that’s 1.8 trillion gigabytes) of data in 2011 alone.

Given this stunning stat, it’s easy to see why records managers in every industry—particularly in the heavily regulated financial services—face big challenges in storing data and records in an inexpensive, efficient and compliant way.

As a records manager, you likely work in a hybrid environment comprising both paper and digital records—which makes your task even tougher. And there’s likely a great deal of pressure on (and even within) your organization to “go digital.” Knowing when to digitize paper records (and what to digitize) is the key to cutting costs and improving efficiency.

In a typical hybrid solution, you’d convert the most frequently accessed records to a digital format for fastest access. Meanwhile, less frequently requested records would get stored offsite, in hard-copy format, for the most cost-effective results; users could order images of them as needed.

The optimal hybrid system will provide your organization with faster, more cost-efficient and compliant information access.

Staring Down the Regulatory Challenge

That last benefit—optimal compliance—figures big in the financial services industry. Here are some of the must-know regulations that inform your records management best practices:

• The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 calls for all transaction records to be kept on file for five years from the end of the fiscal year in which they were created. It also calls for the archiving and easy access of internal communications, for regulatory inquiries.
• The Securities and Exchange Commission’s Rule 17a-4 states, among other stipulations, that firms store all check books, bank statements, canceled checks and cash reconciliation records for at least three years.
• The Financial Industry Regulatory Authority (FINRA) Notice 10-06 on social media advises companies to maintain systems for supervising, retaining and retrieving communications from emails to tweets.
• The Gramm-Leach-Bliley Act calls upon enterprises to stipulate who can access which types of customer data and why they’re allowed to access it.
• The Sarbanes-Oxley Act of 2002, created in the wake of several well-publicized scandals involving corporate fraud and malfeasance, sets a rigorous set of standards for the auditing and reporting of corporate financial records, among other provisions.

Expert Help for Hybrid Solutions

Given this landscape of regulation, know that you don’t have to figure out a solution on your own. A trusted records management partner can guide you through the steps of creating and maintaining a hybrid records environment that delivers the efficiency and the compliance you need. Steps include:

1. Take inventory and set your targets. Digitizing selected records reduces the volume of paper records in circulation while lessening the risk of lost records and enhancing efficiency. But to do this, you’ll first need to identify and understand the ways your firm creates, traffics and preserves its records. It may take some time and could at first be confusing, but you’ll likely see the payoff in later steps.
2. Leverage offsite storage options. Storing infrequently accessed paper records from your office—as well as from your organization’s other locations—in a secure offsite facility saves valuable office space and cuts overhead. And when you do it right, these records are well within reach when you need them: A trusted storage partner can scan paper records within an agreed-upon time frame for rapid access and delivery. Offsite tape vaulting services are quite useful and efficient for such a storage plan.
3. Establish and enforce compliance policies. A financial services firm’s records management policies should include specific criteria for defining both how long information must be retained and how you will maintain confidentiality. And of course, you’ll need to enforce these policies, especially when you’re moving records for storage or destruction. You should also document the entire lifecycle of every record for which you’re responsible.
4. Communicate the payoff. Everyone in your organization needs to understand that records management isn’t just about maintaining a cleaner file room. It goes to the heart of your business. Finding an efficient happy medium between paper and digital files goes straight to the bottom line as streamlined procedures save you money on storage and labor costs while increasing  productivity. A smart records management strategy will keep you in compliance and help protect your firm’s reputation. Your management should understand and help you communicate these critical points throughout your firm as you transition to a new records management system.

Do you have more questions about your firm’s records management options? Read additional Knowledge Center stories on this subject, or contact Iron Mountain’s consulting services team. You’ll be connected with a knowledgeable product and services specialist who can address your information management challenges. 

Related Content:

Tweeting for Keeps: Financial Services and the Social Media Archiving Conundrum

How Records Management Could Protect Against Lawsuits

The Why and How of Creating an Entirely New Role in Your Organization to Master Records Management