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IT: Data Storage: The Leaking Weak Link

Posted: 22 February 2010 | FX-MM | No comments yet

As financial services companies across the globe come under intensified scrutiny in the wake of the banking crisis, public confidence in the current financial system remains low. One aspect of the fallout are the rules on the movement of electronic data, which – according to a Microsoft executive – are urgently in need an overhaul. Drew Hillier investigates how data loss and leakage, particularly, is forcing financial services companies to act more efficiently.

As financial services companies across the globe come under intensified scrutiny in the wake of the banking crisis, public confidence in the current financial system remains low. One aspect of the fallout are the rules on the movement of electronic data, which - according to a Microsoft executive - are urgently in need an overhaul. Drew Hillier investigates how data loss and leakage, particularly, is forcing financial services companies to act more efficiently.

As financial services companies across the globe come under intensified scrutiny in the wake of the banking crisis, public confidence in the current financial system remains low. One aspect of the fallout are the rules on the movement of electronic data, which – according to a Microsoft executive – are urgently in need an overhaul. Drew Hillier investigates how data loss and leakage, particularly, is forcing financial services companies to act more efficiently.

The rules for data storage can vary widely from country to country, with bewildering inconsistencies which vary from an insistence that data is kept for a year to its destruction within in six months. So said Microsoft senior vice-president Brad Smith, who recently called for new trade rules to ease what he called the “quagmire” of laws facing the information providers industry.

“If that’s the case, it’s very difficult to locate a data centre in one country and provide that service to consumers in another country,” proclaimed Smith, addressing the Global Services Conference in Washington in the US.

The sheer number of standards in place, not only differing between countries but also within countries, depending on the sensitivity of the data, present a huge challenge, especially to the banking industry, where the added potential for data leakage has far-reaching implications. Financial services companies must tackle data loss and leakage to regain public trust says Alistair Handyside, CEO of Simplexo, an enterprise search specialist.

“These companies can no longer afford to make mistakes and must prove their commitment to their customers or face losing them,” Handyside insists. “Having accurate and relevant data is at the core of maintaining efficient operations and enabling financial services companies to provide a good customer service. It is also vital that they comply with certain regulatory requirements, including the Data Protection Act, a law that was brought into action in 1998 to protect personal data stored on computers.”

Tools are available to financial services organisations that provide information retrieval securely and in real-time, enabling data to be shared with those who need it while avoiding data loss and leakage.

Enterprise Search tools, for example, can deliver easy, secure access to central confidential enterprise information sources such as customer records, so that local copies of files and records on CDs or laptops are no longer the only option.

Data does not need to be duplicated to be shared

Recent, and highly publicised cases of data loss has raised major alarm bells as many financial services companies use the same system for sharing data, which poses high security threats such as data loss and leakage. To avoid data loss and leakage, financial organisations must ensure that data is kept secure, while at the same time, enabling those who need to view certain data to retrieve the most up-to-date information instantly. One way to achieve this is by using an Enterprise Search tool.

The right Enterprise Search solution enables users to search all data across the enterprise securely and in real-time. Data can be accessed via any computer or remote laptop or even a handheld device; however, as the information retrieved is not physically stored on a hard drive, as soon as the search is complete the application is closed, the data scrubbed, and all information is protected. Therefore, in the event that a computer or laptop is lost or stolen, financial services companies can be confident that all their data remains confidential and secure.

Existing regulations such as the Financial Services & Markets Act, Sarbanes Oxley and Basel II have added pressure on financial organisations to introduce effective practices for risk management and regulatory compliance. These regulations have also created the need to monitor risk on a real time basis and retain comprehensive historical data from many sources – in some cases in perpetuity – so that information is available on demand for management and regulators alike.

Financial advisers and managers need one common system that will allow them to extract precise information from across a number of such data sources without searching each one individually and manually cross-checking and de-duplicating the results. Not only is this very time-consuming, it is also highly prone to human error. An Enterprise Search tool can search across huge volumes of data and deliver one consolidated list of de-duplicated search results securely within seconds.

Effective compliance safeguards a company’s brand and reputation. An Enterprise Search tool enables financial organisations to comply with regulations such as the Financial Services Act, Sarbanes Oxley and Basel II by making information selectively and readily available for inspection without searching each data source individually.

According to independent analyst house, Butler Group, information-based workers spend between 1 and 20 hours a week searching for information. This act of searching is non productive and has a direct impact on an organisation’s bottom-line.

In today’s rapidly-changing economic climate such tools can deliver the real-time information needed to be able to assess and optimise imperatives such as customer service, risk management, operational efficiency and cost reduction.

Keep it where it’s most secure

Increased pressure for reduced processing times means that it is now crucial for financial advisers and managers to have instant access to valuable and accurate data. We once operated in a world where waiting a week to receive a financial document was acceptable, but today that may mean missing out on a substantial financial opportunity, working inefficiently with a backlog of tasks and not being able to make key strategic management decisions – all of which can be very damaging to a business.

By implementing an Enterprise Search tool, financial services advisers and managers can search both structured and unstructured data from any remote location instantly, ensuring that business continues even when employees are out of the office.

An Enterprise Search solution delivers a new experience in enterprise information retrieval. Sometimes even from one single click, it can simultaneously search all information, locally and across networks: email on both the Exchange and archive servers, financial data feeds, trusted external sites such as Bloomberg, word processor documents, images, spreadsheets, databases, accounting applications and SAP, just to mention a few.

Maintain the relevant standards

Financial organisations should select an Enterprise Search tool that is built to Ministry of Defence security standards so that search and index data are encrypted and users’ search results are directly tied to user permissions – no matter what information sources are queried, users then see only the results they have permission to see. This helps to ensure that all information remains secure.

To regain the public’s trust, financial organisations need to remain consistent with their services and ensure that the right tools are in place to secure all customer and corporate data from being leaked to the public or lost when being accessed or shared. As we have seen with cases such as HSBC, losing customer data can lead to huge fines that will definitely have a damaging impact on a company’s performance. Furthermore, it can significantly tarnish a company’s reputation, which cannot always be rebuilt. With such high volumes of vital data, financial services companies must rethink their current operations and take responsibility by implementing effective security measures to control how data is handled.

An Enterprise Search tool can help to ensure that security and productivity levels are not jeopardised when employees are working remotely. Using the right tool, employees will no longer need to spend hours searching for data that most of the time they never find – increasing productivity levels as employees can spend more time using the information for business value rather than trying to source it. This will have a positive impact on customer service as processes will be efficient and accurate and the risk of data loss and leakage will be significantly lower. In effect, helping to build up the public’s trust in financial services companies and creating a better working method for the financial sector overall.

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