The Cost of Doing Nothing: A Legal Perspective on Three Barriers to Upgrading Archiving Technology
Earlier this month, we co-hosted a thought leadership event in New York City with Reed Smith, a dynamic international law firm dedicated to helping clients drive business initiatives.
The lively discussion covered a wide breadth of legal and compliance issues facing financial services organizations today. One specific area of focus kept coming up: many large financial service organizations are using outdated electronic communications archiving technology for managing compliance and e-discovery.
Unfortunately, organizations that are still using legacy archives may find themselves caught in an endless cycle. They put up with slow search results, procure additional storage, and keep paying the maintenance bill. They only see the cost, risk and uncertainty that comes with migrating to the right solution. The cycle repeats.
What those firms don’t see is the agility, productivity and predictability benefits that are possible with modern technologies. Additionally, legal, IT and compliance departments all have a different view into the problems and have trouble arriving at a consensus about how to finally pull the plug on old technology.
Business communications in a modern, global workplace are happening over text messages, social media, voice apps and other emerging collaboration tools, on multiple devices. Legacy tools are not designed to capture and store this volume and variety of digital interactivity, and that deficiency can cause problems where compliance and risk are concerned.
Firms resist upending the status quo and adopting new, advanced technology systems, mainly for these reasons:
- Cost: Moving large quantities of historical data can be expensive and resource intensive.
- Risk: A migration brings the risk of data loss and, subsequently, regulatory or discovery exposure.
- Inertia: Not gaining alignment across key stakeholders pushes the problem down the road.
Cost
Migrating to modern archiving and compliance platforms can be expensive and resource-intensive, and that tends to be the number one reason holding firms back from the process.
Besides focusing on the upfront cost, firms should be considering the opportunity costs they will incur for not moving to new technology. For example, organizations that enable the communication tools their potential client's demand will automatically have a competitive advantage.
Adopting the latest collaborative technologies, such as Microsoft Teams, Slack and Zoom, also provide the opportunity to improve internal productivity. The key to both scenarios is having reliable technology that enables firms to capture, store and retrieve all communications content.
Risk
For a long time, compliance technology was focused exclusively on archiving email. But the scope of what must be protected and monitored today has expanded with the ongoing adoption of new and interactive communication channels. Compliance tools must be able to capture and preserve all that data.
There’s a reputational risk for companies that resist implementing popular emerging communications channels. They can be seen as stodgy or out of touch, which can negatively impact how prospective customers and employees feel about working with them.
Companies also suffer incremental risks when they cannot respond to a regulatory or litigation request because of a system with deteriorating performance. This risk and potential compounded cost increases with every new data privacy regulation, such as GDPR and CCPA, where firms are now under specific requirements to respond within a 45-day timeframe.
Inertia
Some organizations are just comfortable with their current technology and see no reason to make a change. Perhaps decision-makers at the executive level don’t understand the need, and once they see the figures and resources needed, they are left unconvinced that the move to new compliance technology is truly worth the trouble.
Convincing executives to sign off on migration projects may be as simple as explaining the business value. The insights that can be gained from analyzing archived data are valuable business drivers. Analytics have rightly become a larger focus for global financial services firms as business intelligence has become a necessary element to competitive differentiation. Machine learning and predictive analytics are driving the data governance solutions that empower decision-makers.
That’s why organizations must not delay their migration projects — they simply can’t afford to be left behind.
How to overcome the challenges of legacy archives
Fortunately, there are simple ways to overcome these common challenges, and stay competitive:
1. Firms have more options for migrating to modern compliance technology these days. They don’t have to commit to a “rip and replace” model. There are sophisticated ways to mend the gap in the short term, such as running archives in parallel for email and new content sources.
2. Companies should advance their information governance programs, and bring together legal, compliance, IT, and infosec stakeholders to assess the benefits and risks of new communications sources. The discussion of the benefits offered by these new communications and collaborative tools is providing a more complete ROI analysis that puts the cost of migration in proper perspective.
3. Don’t wait to be an example. There is a growing number of cases where firms have run into legal, regulatory or data security challenges with legacy technologies. These incidents finally pushed them over the risk threshold and into full pursuit of better approaches to capture and store important business communications.
Modern businesses have a more global reach than ever before. Technology has fundamentally changed the way employees work, communicate and collaborate. While global connectivity offers businesses opportunities, it also creates substantial challenges when it comes to archiving communications.
Not only are firms faced with unprecedented amounts of data today, but there has also never been such a diverse and quickly changing global regulatory landscape to navigate. Organizations of all sizes need compliance and e-discovery solutions that can meet the modern realities of doing cross-border business. Staying committed to legacy archives will impede organizations looking for global growth.
This is the first in a three-part series about what keeps organizations from upgrading their compliance and e-discovery technology. Next up, we’ll hear from the perspective of IT and compliance stakeholders.
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Scalable for organizations of all sizes, the Smarsh platform provides customers with compliance built on confidence. It enables them to strategically future-proof as new communication channels are adopted, and to realize more insight and value from the data in their archive. Customers strengthen their compliance and e-discovery initiatives and benefit from the productive use of email, social media, mobile/text messaging, instant messaging and collaboration, web, and voice channels.
Smarsh serves a global client base that spans the top banks in North America and Europe, along with leading brokerage firms, insurers, and registered investment advisors. Smarsh also enables state and local government agencies to meet their public records and e-discovery requirements. For more information, visit www.smarsh.com.
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