In 2023, digital archiving finds itself planted firmly in the corporate spotlight.

The volume of data being consumed is growing rapidly
in all facets of life, and certainly in the workplace. We have seen a proliferation of platforms and digital channels being used by businesses, particularly post Covid-19, and while the sheer volume of information has made it tougher to manage, the regulations governing it have become more stringent. The tightrope is becoming increasingly difficult to navigate.

Such circumstances require careful adaptation, which is what we’re seeing in the archiving space, and particularly in financial services. We’ll look at 4 digital archiving trends that are occurring right now, and that will shape the remainder of 2023.

1. Record-keeping requirements continue to intensify

Government agencies like the Securities Exchange Commission (SEC) and Commodity Futures Trading Commission (CTFC) have increased their pace of rulemaking in recent months. This comes after the introduction of the SEC’s new marketing rule in November 2022, a seismic development which has led to a complete rethink of how firms must handle their digital communications. 

One might have anticipated the regulator taking their foot off the gas with such overhaul on the horizon. On the contrary, recent reports show that the agency has been drafting regulatory proposals just months ahead of schedule, accelerating a pace of rulemaking that had already raised concerns over employee burnout. In August 2022, with firms scrambling to  ensure adherence with the marketing rule, the commission released twice as many proposals as during the entirety of 2021, and more than in any of the previous five years.

2. For far more platforms, archiving becomes standard

Referring back to the new marketing rule, the update redefines the term ‘advertising’ in an impactful way. The preceding, anachronistic ‘Advertising Rule’ had remained largely unchanged since its adoption in 1961, an era of print media, TV and radio. The new marketing rule formally addresses the technological advancements that have since taken place, meaning that a significant number of digital communications platforms (websites, email, social media) now find themselves under regulatory scrutiny.

With ephemeral messaging apps like WhatsApp, WeChat and Telegram, the urgency is even greater. In September, the SEC and CTFC
fined 16 leading financial firms (including Barclays, Goldman Sachs and Morgan Stanley) a combined total of almost $2 billion over digital record-keeping failures. Employees had used personal devices to discuss business matters through WhatsApp, and these communications were not archived.  

Since then, the SEC has broadened its scope to look beyond broker-dealers and into registered investment advisers (RIAs). These smaller RIAs are subject to the same regulations as the firms that were previously penalised, and while their non-compliance may be less notable, the SEC wishes to comprehensively tackle this widespread cultural issue.

Digital platforms are now not only a huge part of business operations, but tools that must be captured and archived for compliance purposes. This applies across the board for digital channels in financial services, so coupled with the crackdown on ephemeral messaging, many more firms should be roused into assessing their policies as a matter of urgency.

3. Greater data storage requirements

With so many more platforms now being archived, the requirements for digital data storage have also grown dramatically. This is especially true given the quality of data. In the case of websites, for example, dynamic elements are now ubiquitous, and must be captured to give a true representation of how communications, or ‘advertisements’, are presented. Similarly, with so many businesses relying on a more bespoke approach – e.g. through geolocation or CMS personalization – the number of customer eventualities being captured (and therefore the volume of data) has multiplied.

Compliance teams will have their hands full, and so high level data processing and searchability will become far more of a requirement for those that wish to respond to audit and litigation requests in a timely manner. Further, it won’t be efficient (or perhaps even possible) to manually root through the vast swathes of data being accumulated, and so advanced search features will become more of a necessity, even for the smaller businesses for whom it may have previously been deemed a luxury. 

In meeting the challenge of expanding data volumes, we can expect cloud archiving solutions to grow in popularity. They offer clear benefits, not least the scalability required for all firms, from the smallest RIAs to the leading broker-dealers stung by the WhatsApp probe. With cloud data archiving, organizations can avoid the expenses associated with maintaining an on-site solution, whilst not making any compromises on security. Cloud providers have invested heavily in maintaining reliable infrastructure, and cloud data is encrypted in transit and at rest.

4. Employee satisfaction takes greater precedence

Aside from the technological progression and broadening possibilities we’ll witness in 2023, there is also a human impact to consider. As the onus on compliance grows, the role of compliance officers is becoming more challenging, with greater individual responsibility due to myriad factors, such as the frequent re-evaluation of what rules they’re being held accountable to.

Last year, Corporate Compliance Insights conducted a
survey
on working conditions, stress and mental health issues amongst compliance personnel. When sharing the results, it became clear that there is still a lot of work to be done. 59% of respondents reported that they felt ‘burnt out’, with the greatest concern (69%) being that of the pace of changing regulations. As mentioned at the start of this article, that pace has only accelerated in recent months. 

In an increasingly volatile and challenging landscape, compliance staff must be kept happy and supported with tools that will make their job not just manageable, but enjoyable. By simplifying compliance processes and reducing the burden on individuals, businesses can free up hours in the day, cut stress levels and minimize the likelihood of human error, ultimately improving employee satisfaction.

How to tackle the year ahead

As with most recent years in the digital archiving space, 2023 is set to continue moving on an upward trajectory. 

A growing reliance on remote communications in the workplace has led to a proliferation of digital messaging platforms, which has led to a surge in data consumption, which in turn has led to stricter governance from the regulators in order to ensure corporate accountability. 

This information, which must be recorded and stored, puts a strain on data capacity, leading to greater reliance on cloud-based infrastructure. The abundance of data which must be managed, as well as some monumental fines from the regulators, lead to a stressful time for those in charge of handling compliance.

These factors are all interconnected and lead to one destination; the need for greater compliance resources in regulated businesses, whether through additional personnel or third party solutions. As regulations continue to tighten, consultancy is key, and data archiving experts can unburden busy staff by providing  up-to-date advice on how to best meet those regulations. 

While regulatory demands and enforcement actions have increased significantly in recent months, an exhaustive record-keeping strategy will ensure that no nasty surprises await in 2023.

Source: https://www.finextra.com/blogposting/23754/digital-archiving-trends-2023?utm_medium=rssfinextra&utm_source=finextrablogs