Archiving has been a key technology for many organizations for almost two decades, but for the financial services industry, it’s a requirement. As with any regulated industry, effectively capturing and storing business communications continues to be essential as firms strive to remain compliant with current and pending data regulations, such as MiFID II, the Financial CHOICE Act, and GDPR.
Over time, the what, why, where, and how of archiving have continued to evolve.
Back in the day, email was the what: the most mission-critical communications app, and the form factor used to design tools to store and review data. Storage management was the primary why: IT needed to ease the storage bloat on the email servers, eliminate the performance hit taken by mail servers due to excessive data, and ensure production system backups happen within the backup window, etc.
These first generation archive solutions were located and managed on premises, along with all the licensing, management infrastructure, and ongoing maintenance costs that accompanied the archive.
The Overdue Shift to Cloud Archiving
Firms that have spent years managing and maintaining these first generation email archives have experienced similar results: high and unpredictable cost, high IT overhead, and unreliable performance not meeting the archiving requirements of today’s workplace. The IT results alone make it easy to see why there is an ongoing shift from on-premises archiving to the cloud.
With cloud-based archiving, firms aren’t faced with the enormous set-up costs or the ongoing costs of managing the archive. Cloud archives also have minimal staffing requirements, as management and maintenance is handled securely by the service provider. As a company grows, the cloud archive can easily provision users to the system without concern for infrastructure modifications.
For firms in the financial services industry, there are a number of additional factors that make cloud archiving inevitable.
Financial services firms have led other industries in their adoption of new, dynamic communications tools such as Twitter (News – Alert), WeChat, WhatsApp, and Slack to meet the demands of clients and prospects;
These firms operate with explicit requirements for the capture, preservation, and supervision of communications content – regardless of whether that content resides on-premises, in the cloud, or some combination.
Financial services firms operate in global marketplaces, with requirements that typically vary by geographic market and financial product. The complexity of these requirements places a premium on agility in ensuring that policies can be managed granularly to the needs of each location.
Many of the on-premises archiving vendors have either been sold off or acquired by private equity firms. In both cases, it is unlikely that legacy archiving will be a target for technology innovation in the future.
The choice firms face today is to 1) continue managing today’s communications with on-premises technologies designed for email more than 10 years ago and continue to experience the high and unpredictable performance, high overhead, and unpredictable future, or 2) examine modern technology designed to address the communications volume and variety that their firms are encountering today.
Flexibility is Required to Navigate the Regulations of a Global Marketplace
While cloud-based systems are providing greater flexibility for global financial firms to remain agile, cloud solutions are not homogenous nor are they an all-or-nothing proposition. Many firms today are leveraging cloud within hybrid deployments to meet geographical and regional data privacy and jurisdictional requirements.
For example, a firm may choose to archive U.S. users in a dedicated cloud environment based in the U.S.; EU users in a multi-tenant environment in the EU; and users with strict data locality requirements using on-premises solutions within those markets. This deployment flexibility would not be achievable, nor cost-effective, with legacy, on-premises technology.
Navigating Diverse Cloud Archiving Approaches
Cloud archiving has been touted as the next generation of archiving for the modern enterprise, but in truth, not all cloud archives are the same. Vendors simply hosting their existing on-premises archives in the cloud have not made the required investments in a distributed architecture. As such, many older cloud archive providers suffer from the same legacy technological limitations as on-premises archives. With the huge amount of data being generated today and the expected ongoing growth rate, this legacy technology reliance is a questionable strategy.
For financial services firms, the exponential growth of data from communication channels and other sources has made leveraging the flexibility and scalability of the cloud a necessity when it comes to archiving. For firms to remain competitive, it is imperative that they move away from their legacy systems and begin migrating their archives to the cloud.