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To pay the cost of outsourcing electronic records storage (ERS) or not to pay the cost of outsourcing ERS? That is not the right question. You should be asking, “How can I leverage economies of scale for this budget- and time-consuming task?”
If you are reading this, you likely operate under SEC 17a-4. You already know how cumbersome storing the massive amount of data required can be. And, how costly — even when you manage the process in-house. Consider the cost of manpower, hardware, storage equipment, and software automation.
Here’s a case for not doing it yourself:
- Reduced cost. There’s a lot of overhead associated with maintaining and storing the massive amount of electronic records that even small organizations generate. It requires a big budget commitment to robust hardware, data storage equipment, expensive automation software requiring frequent updates, and lots of manpower. And that’s just tip of the iceberg. Because data archiving providers store data for so many businesses, the cost-per-customer (you!) is significantly reduced. You could D.I.Y., or you could take advantage of a professional data archiver’s economies of scale.
- Free up your equipment, your systems, and your people. The majority of records mandated by SEC 17a-4 is static. It’s data that has completed any active work cycles and will no longer change. If you’re managing its archival in-house, you tie up your systems for hours on end backing up the same data over and over as you backup your active files. Outsource and free your in-house computers and processors to just manage active data.
- A single-minded focus on your data. Your archival provider is laser focused on one thing: Keeping data safe and properly archived for each of their clients. Unlike most in-house tech support, it is all they do. They stake their reputations on keeping data secure and easily searchable by any authorized user at any time. FINRA compliance, E-Discovery requests, or general records access is easier and makes minimal demands on your IT team’s time.
- Customized compliance. SEC 17a-4 compliance is business-specific. Data archiving should be business-specific too. Most third-party providers customize the electronic record archiving processes to ensure each client is fully compliant with the relevant SEC rules. Make sure your provider can deliver that option.
- The SEC requires a designated third party. Under 17a- 4, SEC-regulated firms must retain a designated third party (D3P) who can access the firm’s electronically stored information. Outsourcing your electronic records archiving with a firm like Patrina meets the SEC requirement for a D3P, and makes more sense than hiring technical consultants. In most cases, retaining consultants and training them on all your records platforms cost more money, and takes more resources from your IT staff than using an outsourced third party firm.
Bottom line: Electronic records storage costs money. But, outsourcing can be more economical – especially when you not only have to store your data, you have to deliver and pay any costs incurred to produce your records on demand. To get it right without breaking the bank, you need a trusted technology partner. Like Patrina. So ask about our comprehensive compliance solutions specifically designed for you — Broker-Dealers, RIAs, and IBs.
Let’s talk (212- 233-1155).