Earlier this year the FCA introduced new guidelines to encourage firms to embrace the cloud. While compliance obligations remain paramount, it does open up the pathway for organisations to more effectively comply with data communications regulations and
lower overall costs. However, there are still fears in some quarters that archiving in the cloud is more expensive and less secure than when carried out on-premises, but like the FCA guidelines those opinions need updating too.
In the past, first generation cloud based products lacked the functionality and scalability of their on-premises counterparts. In direct comparison, the costs savings were negligible in order to meet the robust requirements of the financial services industry.
The same was true of security. It was easier, cheaper and more effective to secure data behind a firewall.
But both technology and threats to data have changed in recent years. The cost of deploying, managing, supporting, backing-up, upgrading and generally sustaining performance means organisations need to consider everything from floor space to cyber liability
insurance. The very nature of regulated industries such as financial services means that this data has to be archived and easily retrieved for a number of years.
Under MiFID II - Article 16 (7) forexample it says: The records … shall be provided to the client involved upon request and shall be kept for a period of five years and, where requested by the competent authority, for a period of up to seven years.
It stands to reason that in order to comply, firms will be obliged to carry out multiple hardware refreshes, renew numerous support contracts and secure other resources such as staff over the period.
In contrast, all of these associated costs are already calculated into the contracted price with cloud archiving. The one question mark that remains is the volume of data archived. Some service providers charge incrementally if data levels exceed an expected
level, others vary depending on the functionality required over data sets. However this expense can be countered by the performance lag as information volumes grow and the additional architectural upgrades required to on-premises systems just to maintain the
Research from one of the major analysts firms indicates that eighty percent of all new archiving projects are now deployed in the cloud. Cloud archiving offers greater flexibility in the variety of non-email content types it can retain, alongside other functionality
such as managing legal holds and advanced analytics to improve the effectiveness in searching through large data sets.
Security is, as always, a major consideration. Certainly service providers vary in the level of rigor they apply to data security and due diligence in the selection process of any provider is essential. There is also to be considered the variety of laws
affecting where data can be stored and in which country. However, this ignores the fact that the largest source of data breach comes from internal actors. This places immediately accessible data sources more at risk than those properly encrypted and remotely
secured within a service that offers certification, audited processes and high level security expertise.
In the early days of cloud based archiving many organisations compared services to the on-premises systems they already had in place concluded that it was more expensive or at least not a sufficient enough saving to warrant change. With analysts now putting
the costs at least forty to sixty percent lower than for on-premises charges, it’s time to take another look.