In the rapidly evolving realm of financial services, companies face numerous challenges, including regulatory compliance, cybersecurity, and the imperative for innovation. In this article, we explore the reasons why it’s crucial for you, as a financial organisation, to retain legacy data, delve into the significance of managing this data correctly with the right processes, and highlight the key data laws you must abide by to ensure compliance and foster trust.
Financial organisations operate within a heavily regulated environment, making compliance a top priority. Retaining legacy data is essential for meeting regulatory requirements imposed by authorities such as the Financial Industry Regulatory Authority (FINRA) in the United States, the Financial Conduct Authority (FCA) in the United Kingdom, and similar regulatory bodies worldwide. These regulations often mandate specific data retention periods to ensure transparency, accountability, and protection of consumer interests. For many financial institutions, it is necessary to retain legacy customer interactions for a minimum of seven years.
Audits, Investigations, and Dispute Resolution
Retaining legacy customer data enables financial companies to effectively address audits, investigations, and dispute resolution processes, as well as Freedom of Information requests from customers themselves. Historical data plays a vital role in reconstructing events, analysing patterns and trends, and providing evidence when necessary. Furthermore, by responding promptly to these enquiries and claims, there is more opportunity to foster trust and demonstrate your commitment to business transparency.
Risk Management and Fraud Detection
Legacy data serves as a valuable resource for risk management and fraud detection. By analysing historical data patterns, financial institutions can identify potential vulnerabilities, detect unusual activities, and develop robust risk mitigation strategies. This data-driven approach helps protect customers from fraudulent activities, ensuring the integrity of financial systems and maintaining market stability. This adds additional cybersecurity capability as spam attackers and bots can be filtered out, identified through unusual activity.
Business Analytics and Insights
Retaining legacy data can unlock invaluable business insights. Analysing historical interaction data allows financial organisations to identify trends, make informed strategic decisions, and gain a competitive edge. By leveraging advanced analytics techniques on legacy data, companies can enhance customer experiences, develop personalised services, and optimise their operations for increased efficiency.
Managing Legacy Data Correctly with the Right Processes
Effective management of legacy data goes beyond its mere retention. True legacy data management involves implementing the right processes and overall framework to ensure data integrity, accessibility, and security.
Financial institutions must establish robust data governance frameworks to manage legacy customer data effectively. This includes defining data ownership, establishing data quality standards, implementing data classification schemes, and ensuring proper documentation and version control. By managing legacy data with structured processes, companies can reduce the risk of data corruption, improve data accuracy, and enhance the overall data management lifecycle.
Data Security and Privacy
Given the sensitive nature of individuals’ financial data, managing legacy data must involve stringent data security and privacy measures. This includes implementing access controls, encryption techniques, and regular security audits to safeguard against unauthorized access, data breaches, and cyber threats. Compliance with data protection regulations, such as the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 in the UK, as well as PCI DSS if payment data is included, is paramount to ensure the privacy rights of individuals are respected. It also means you can avoid hefty fines from breaching these regulations.
Data Retention Policies
Financial services companies should establish clear data retention policies that align with regulatory requirements and business needs. These policies should outline the specific categories of data to be retained, the retention periods, and the procedures for securing the data repository, as well as the safe disposal when retention is no longer necessary. By adhering to well-defined data retention policies, financial companies can avoid the risk of retaining unnecessary data and mitigate potential compliance and security issues.
Choosing the right legacy data management solution
Retaining legacy data is a critical practice for financial services companies, ensuring compliance with regulatory obligations and enabling effective risk management, fraud detection, and business insights. However, managing legacy data correctly with the right processes is equally important. By implementing robust data governance, ensuring data security and privacy, and establishing a clear data retention framework, financial institutions can effectively harness the value of legacy data while mitigating associated risks. By doing so, they can build trust among customers, maintain regulatory compliance, and drive sustainable growth in an increasingly digital landscape.
But choosing the right legacy data management solution is key. At Liquid Voice, we use our tools and process automation to access your legacy call and interaction recordings across all of your platforms. We can then review all the legacy data to redact any sensitive or personal information that cannot be retained. Liquid Voice’s single ‘indexed’ pane of glass provides a consolidated repository where we enrich meta-data associated with each interaction by linking elements of data across functions, customers and transactions. Having all legacy data in an advanced single secure repository also improves Search & Replay capabilities for easier access when it’s needed for Freedom of Information or regulatory requests.
Need help harnessing the power of your legacy data? Find out more about what we can do here or watch this short video on how our legacy recording management solutions work.