In today’s financial services landscape, records management has become a complex compliance issue that firms can no longer afford to overlook.
According to Corlytics, what was once a largely manual process of storing paper documents has evolved into a critical area of regulatory risk, driven by the explosion of digital formats, jurisdictional data rules, privacy laws and a fast-evolving global regulatory environment.
The definition of records management has significantly expanded beyond simple document storage. It now encompasses digital files across email platforms, collaborative tools such as Microsoft Outlook and SharePoint, and databases spanning on-premise servers and cloud-based solutions. As financial institutions contend with rising transaction volumes and fragmented operating models, the pressure to understand and fulfil compliance obligations has never been greater.
Regulatory frameworks across different regions add further complexity. In the EU, the General Data Protection Regulation (GDPR) dictates how personal data must be handled and stored. In the US, the Sarbanes-Oxley Act (SOX) and SEC Rule 17a-4 impose stringent mandates around record preservation, particularly for broker-dealers. Meanwhile, the UK’s Financial Conduct Authority (FCA) enforces detailed rules around record-keeping. These requirements collectively demand that records are maintained in a non-rewritable, non-erasable format and are readily accessible for defined periods.
The growing dependence on third-party cloud providers introduces new compliance risks. While external hosting can offer efficiency and scalability, it also raises challenges related to data sovereignty, cross-border data flows, contractual responsibilities, and cybersecurity. Regulators are increasingly scrutinising how firms manage records in outsourced environments, especially when the providers themselves may not align with strict regulatory demands.
Compliance professionals are now required to monitor regulatory developments across dozens of jurisdictions, adjusting policies in real time to remain aligned with shifting mandates. The lack of international harmonisation in record-keeping obligations makes it essential for institutions to maintain a dynamic, adaptable records management strategy. In some cases, laws have extended minimum retention periods—such as the US Office of Foreign Assets Control (OFAC), which recently increased its requirement from five to ten years.
Different regulatory regimes impose varying standards. SEC Rule 17a-4 requires six years of record retention for broker-dealers, while the EU’s MiFID II regulation requires five years of record retention, extendable to seven. Ensuring compliance across such varied rules demands careful coordination, particularly when third-party data storage providers are involved. Firms must ensure their retention systems comply both technically and contractually with these rules.
Beyond compliance, strong records management practices offer operational advantages. From enabling better data analysis to automating workflows and strengthening cybersecurity, effective data governance is foundational to enterprise resilience.
Regulators are stepping up enforcement. In 2021, JPMorgan Chase was fined $200m for recordkeeping failures tied to employee use of personal devices and messaging apps. “Widespread and longstanding failures” were cited, highlighting the serious compliance risks of uncontrolled communications. In 2024, H2O Asset Management paid €250m to investors after UK regulators uncovered fabricated records and improper due diligence—demonstrating the reputational and financial costs of poor records governance.
A persistent internal challenge for many financial firms is the lack of clear ownership for records management. Compliance teams often set policies, but IT and operations are responsible for implementation, and third-party providers add further ambiguity. This fragmented approach risks gaps in accountability—particularly when service providers fall short of regulatory expectations.
To tackle this complexity, some firms are centralising records management within compliance teams, while others prefer a hybrid model that balances oversight and operational delivery. As requirements become more demanding, many institutions are turning to RegTech solutions such as Corlytics, which offer automated tools for monitoring regulatory updates and aligning global records management practices accordingly.
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