Leveraging the E-archive
September 22, 2008
Over the past five years, most institutions regulated by the Securities and Exchange Commission have implemented compliance archival technologies. However, this is likely only the first step of a three-phase evolution that, in the end, will ensure that financial institutions are leaders in managing and leveraging unstructured intellectual property, commonly referred to as electronically stored information, or ESI.
Though Wall Street historically has led other industries in the adoption of new technologies, these adoptions were the product of internal, profit-driven decisions. The adoption of archival technologies, however, is the result of regulation and while financial institutions resisted implementing these technologies, ultimately the beneficiary will be the institutions' own bottom lines.
During 2001 and 2002, the SEC staff debated whether e-mail should be considered customer communications and thus subject to Rule 17a-4 of the Securities and Exchange Act of 1934. Forced by revelations that emerged from e-mails during the dot-com crash, the SEC decided that e-mail and other e-messaging records--instant messages (IM), Bloomberg and Reuters messages, etc.--are subject to regulatory retention. Phase one, or the deployment of e-mail archive technologies, has been completed at many firms, and most IT and compliance managers mistakenly see this as the final step of the project.
Typically, current archival technologies forward a copy of every e-mail from the institutional e-mail system--we'll use Microsoft Exchange for the purposes of this article--into the archive server. Thus, one copy of the e-mail is retained on the Exchange server and one is retained in the archive. Though this architecture may seem needlessly duplicative, savvy IT administrators realize that the archive offers solutions to many of their pressing information management problems.
Most users do not spend time managing and, more importantly, deleting e-mail. This causes the Exchange servers to become bloated repositories of old, unnecessary communications. Operationally, the size negatively affects the overall efficiency of the e-mail system by demanding time and resources to backup e-mail records that are no longer useful.
Over the years, Exchange administrators have tried many strategies to reduce the size of the information store, including imposing mailbox limits or forcing users to locally save e-mail records on their workstations. These approaches did little to stem the tide, and the size of the e-mail store on the Exchange server continued to grow. Worse, senior management did not feel they should be subject to these limitations. In fact, in most firms the size of executives' mailboxes are by far the largest, and they sometimes claim to have every e-mail they have ever sent or received, without realizing the cost incurred in backing up these files each night.
Sophisticated Searches
In phase two of the e-archiving evolution, Exchange administrators will take advantage of the compliance copy of e-mails. We've seen many institutions delete all e-mail on the Exchange server after, perhaps, one year and require users to search for older e-mails in the corporate archive. Users then discover that the search technologies on the archive system are far more sophisticated than those on Exchange or Outlook, so many choose to use the archive for all search functions. The archive also incorporates users' other e-messaging, such as IM and Bloomberg messages, allowing them to search all their e-messaging from the past seven years. Phase two, therefore, leverages the archive by providing users with both a better search tool and a comprehensive repository, allowing the administrator to dramatically reduce the amount of e-mail stored on Exchange. Exchange servers can then be configured to do what they were designed to do--send and receive e-mail-not serve as e-mail warehouses.
