Preserving your legacy with archived data management
Typically, data conversion is costly. It’s no secret that migrating to a new system, whether because of a merger or acquisition, or because it’s simply time to replace a legacy archival system, can be a time-consuming and risk-heavy undertaking. Literally millions of images, reports, statements and signature cards–which must be retained in a financial institution for ongoing research–have to be extracted in a traditionally labor-intensive exercise to meet the demands of constant regulatory change and increased oversight.
As these demands evolve, it becomes increasingly important to take an honest look at the way your institution manages its data. Prior to any merger or acquisition, it could pay to embrace innovation in order to limit the total amount of risk exposure, man-hour commitment and inefficiencies usually found with legacy content management systems – but without losing the legacy data in the process.
With the proper strategy, planning and steps in place, you don’t have to break the bank during a conversion and you don’t have to lose your legacy either. The proper implementation of any data conversion always starts and ends with strategy. When planning for future growth, create a strategy that will minimize unnecessary headache especially if your institution is supporting multiple infrastructures and employees. Enable a seamless migration that will maintain all legacy or merger and acquisition images and data.
First, take into consideration the types of legacy media currently being used: tapes, optical disks, CDs, DVDs, legacy servers, etc. These are antiquated formats that are typically fragile and susceptible to damage or system errors, potentially resulting in loss of data. Running these legacy systems could actually negate some of the value of retaining data, while dragging the institution down into a pit of inefficiencies. This type of data is also not easily accessible, consolidated or secure for ongoing research.
Warren Buffet once said, “Price is what you pay, value is what you get,” and this is especially true with data conversion. When a conversion is on the horizon, find a solution that offers your institution the chance to transform paper documents and outdated media formats into electronic images that can be quickly accessed. This replaces manual searches through physical files and also eliminates unauthorized access to confidential information.
Additionally, legacy core systems and merger or acquisition data involve multiple data warehouses and various transactional systems. This all requires continual integration and interoperability updates while adding up to a high total cost of ownership. Converting legacy data into a new system could potentially increase usability, add cost savings by eliminating ongoing hardware/software maintenance and enhance security by consolidating archived data in current systems designed to protect against today’s risk threats. A system built to be adaptive also eliminates the financial deterrent to implementing new technology and removes potential roadblocks to success. As customer’s needs evolve, an innovative institution with a flexible technology backbone can easily add solutions, services and new technology offerings to accommodate the changing landscape. A faster-to-market approach can position banks for a stronger competitive advantage.
Moving data into the new system will save on cost, consolidation efforts and increase overall efficiencies. Storing all data in one place for research is the ideal scenario. However, if that target system is a service bureau where you pay high rates for storage, you may want to consider other more affordable retention options. The value of having data that is accessed easily, consolidated, and secure for ongoing research is absolutely critical to business success.
Increased retention regulations and compliance involving financial transactions tracking on acquisition and customer data have augmented banks’ responsibility, forcing them to maintain the data and its accessibility and provide greater transparency to regulators. The ownership of this data and protecting this legacy archive becomes very important and should be considered early in any strategy.
Meeting the demands of a landscape dominated by regulatory change can be daunting. The legal retention requirements in most states mandate that financial institutions retain client information such as checks, statements and reports, for a period of seven years. However, other states require 10 years for statements and any transactional information. Scanned loan files or other scanned electronic documents/client records must be retained for the “life of the loan” (as many as 30 years) or the “life of the transaction.”
If your current archive system does not have an auto-purge, consider that data beyond these required retention dates can be carved out to minimize conversion and ongoing storage costs. A manual purge prior to a potential conversion can be just as beneficial. If there are scanned document images unrelated to loan files, they don’t always have to be retained. With a unique identifier, occasionally those unnecessary documents can be removed. Often, there is both a text and image version of a statement; you are required to only retain one version for ongoing research.
A financial institution that can eliminate backlogs of paper records by electronically capturing their documents for permanent archival in their document imaging system can greatly reduce costs and storage space needs, expedite research and streamline information access and distribution. Remember – if you fail to take care of your legacy, you are often left with nothing.