Relieving retention: taking the stress out of retention schedules in finance
Many organisations are aware of where their document retention obligations end, but are nonetheless unwilling to commit to sentencing schedules. There are a number of reasons for this, the most common being that large companies often can’t be entirely sure what their archives contain – especially if those archives date back to the pre-digital era. From a liability perspective, the relatively small cost of ongoing storage is more than justified by the possibility that an arbitrary sentencing mechanism might accidentally destroy mission-critical documents.
One mortgage broker Client Services Officer that we spoke to (who asked to remain anonymous) reported that his company, despite only being required to retain paper documents for 7 years, had more than 30 years of records archived. “We keep everything,” he said. Why not audit the documents? The time- and money-consuming task of going through the archives would require a financial investment equivalent to decades of static storage costs.
And yet the fact remains: this company is storing – and paying – more than four times what it should be under current retention regulations. And it’s by no means the exception. The practice is common in the finance sector. Businesses are conscious of the significant amount of money being wasted, but can feel at a loss to know how to deal with it. Additionally, a complicating factor for many is whether their overcautious retention practices are putting them at risk of violating the Privacy Act. They are stuck between a financial rock and a legal hard place.
Experienced information management firms are conscious of the evolving legislative environment and are able to keep track of stored information over time, setting up retention and sentencing schedules that ensure destruction occurs when documents reach the end of their lifespan. These companies will also assist with proof of compliance, providing certificates of destruction that can be presented in the event of an official audit.
For most financial organisations, better management of client identifying information will have the immediate benefit of reducing their information storage costs. Closer attention to sentencing schedules means that documents are less likely to occupy costly shelf space, allowing for a dramatic reduction in information storage overheads.
The other hallmark of a high-quality information management solution is the ability to ensure all of an organisation’s records comply with the Privacy Act and other relevant legislation without significantly driving up costs. This is important, because it removes a simultaneous financial obstacle and legal Achilles’ Heel for many businesses wanting to organise their records. Find out more in Grace’s FREE in-depth information management report for the finance industry – available exclusively at www.grace.com.au/information/finance