The regulatory environment is becoming increasingly
complex for UK-based enterprises, with UK, EU and industry-specific
bodies imposing a growing level of legislation, writes Lynn
Collier, solutions director,
Hitachi Data Systems
EMEA.
Companies must stay alert if they are to avoid public
embarrassment, fines or even legal proceedings. Smart organisations
are preparing for compliance but the smartest are realising that if
approached strategically, compliance is not a burden but an
opportunity.
Learning lessons from Mifid
Despite being forewarned about impending regulatory changes,
companies are often ill-equipped to deal with legislation because
its true impact may not be immediately obvious.
For example, the
Markets in Financial Instruments Directive (Mifid) introduced
in October 2007, which most financial services companies need to
follow, demands that about three times the current amount of
contact records must be stored than previously. After a few months
of complying with Mifid, CIOs and IT managers began to hear their
storage infrastructure creak under the strain of the data deluge.
In some cases, the influx of new data volumes began to cost the
organisation serious money as it was stored on expensive,
high-availability disk systems.
For many financial services companies, Mifid has meant a lengthy
retrospective overhaul of their data storage processes and
infrastructure. Switching to highly scalable storage systems to
avoid expensive upgrades implementing tiered storage to lower
management expenses introducing virtualisation to maximise capacity
and running data deduplication software to reduce data volumes are
all common approaches.
Coping with compliance
To support compliance demands today and in the future, it is key
to build a robust, adaptable and agile infrastructure. There are
three important things to consider when re-engineering your IT
infrastructure to support compliance objectives:
- The immense increase in data volumes often associated with
compliance can require the implementation of an archiving platform.
When choosing an archiving infrastructure, it is important to
select an open system. Many archival systems store data in a format
unique to that vendor, which can cause problems when the system has
to be upgraded and the data transferred to a new format. In some
cases this can lead to volumes of unreadable data or a lengthy and
expensive migration process.
- When it comes to retrieving data, the storage process is key.
Files saved without the correct descriptions (meta data tags)
attached will be almost impossible to find. Ingraining a culture of
uniform tagging throughout the organisation will pay dividends when
regulatory authorities request specific data at short notice.
- Future-proof technology is more cost-effective than cheap
storage methods. While tape storage is appealing for its price and
familiarity, it can degrade over time and managing data deletion in
such an environment can be challenging. This makes tape an
unsuitable medium for compliance archiving whereas the reliability
and longevity of disk-based systems makes them the obvious choice
for critical information archives.
Driving business benefit from necessity
Forward-thinking enterprises are increasingly looking to drive
business value from the necessity of compliance. As organisations
log more and more data relating to customer contacts and financial
information, it makes sense to harness this knowledge for business
advantage, ultimately generating profit for the company.
The rate of new legislation does not look likely to abate for
some time. From the Financial Services Authority's
Financial Services Compensation
Scheme to updates to the
EU Data Retention Directive, the need to proactively address
potential compliance issues before they arise will remain. By
planning your IT strategy to support compliance objectives well in
advance, your company will be able to deal with upcoming
regulations with relative ease.
If this forward-thinking approach becomes more common, we will
see many more companies mitigate the costs involved in compliance
and take the opportunities that it offers.