Mitigating risk underpins regulatory compliance

The regulatory landscape has become extraordinarily complex over the past decade, with financial institutions now facing a raft of compliance requirements ranging from accounting standards and consumer privacy to governance and anti-money laundering.

The implications of business continuity and availability on regulatory compliance are broadly understood according to recent research conducted by HP, with reporting, regulatory compliance and risk management cited by several senior managers as key Business Continuity and Availability drivers. Yet many begrudge the compliance focused investment, as one Operational Risk Manager confirms: “Regulatory compliance is essential to comply with, so we don’t have much choice.”

This attitude is understandable given the fact that while compliance is a major driver so too is the need to deliver consistent, high quality customer services. Attaining a single, consolidated view of customer information is an ongoing priority, while organisations continue to struggle to remain productive and efficient given the excessive internal communication enabled by messaging systems that deliver more information than can be effectively managed.

As one Director of Customer Programme says, “Customer information is critical to the development of the bank. If we fail to do it right that can create negative ideas in our customers’ minds, and our sales people will not meet the right people.”

Furthermore, cost is perceived as the major barrier to implementing new compliance solutions – over half of all respondents cite cost and reliable resources a key issues. There is, therefore, a clear demand for strong, integrated compliance strategies that can address not only regulatory issues but also provide a platform for reducing the escalating costs associated with information archive, audit and retrieval.

Indeed it is a pressing need to reduce the costs associated with information management that is driving many organisations towards Information Lifecycle Management (ILM) tools. By improving the efficiency of information management processes, organisations can significantly reduce costs while improving their information control.

Understanding the regulatory relevance of various data types, for example, can enable organisations to stratify their storage to reflect the probable retrieval speed required in the event of a compliance demand. This in turn will allow the organisation to make informed decisions on the most cost-effective storage media. By implementing email traceability and audit, preserving electronic documents, meeting deadlines for electronic document discovery and restoring historical email and files from backup tapes, organisations can fundamentally reduce the risk associated with regulatory compliance.

However, ILM should be addressed alongside the wider framework of Business Continuity and Availability, ensuring that the organisation’s information assets remain available in the event of an outage or incident, thus demonstrating effective control and security of information.

ILM also provides business managers with the opportunity to capitalise on business information. By creating a consolidated information repository that incorporates multiple data sources – and data types – organisations can achieve the invaluable single customer view and regain control over the information deluge to deliver quantifiable business value.

Effective information management enables business to meet the mandates for strict controls on the retention, retrieval, auditing, privacy, and security of data. Therefore, at its core Information Lifecycle Management is a matter of good business practice and sound corporate governance.

But that value will be swiftly eroded if organisations opt for piecemeal business processes or technology solutions. To understand how best to approach ILM, organisations need to undertake a detailed evaluation and review of their individual information requirements – for example, an information discovery workshop.

The workshop will address critical information management issues, identifying key areas of business and IT for maximum risk reduction. Even more importantly, the workshop will support the development of integrated ILM policy and roadmap, to ensure that ILM solutions investment addresses information management on an enterprise-wide basis, and delivers maximum ROI.