In the Michael Chabon novel Wonder Boys, Professor Grady Tripp is a formerly brilliant but now clapped-out novelist. He is writing his second novel and has reached page 4311, with no end in sight. His student suggests delicately that he has failed to take his own advice. “You always say that writing is about making choices. You don’t seem to have made any. At all.” For example, she says, “do we really need all the dental histories of the horses of the main characters?”
Eoin O’Shea, CEO of Temple Grange Partners, thinks financial institutions who don’t make choices about record keeping risk being in the same position as Professor Tripp. “Retaining everything is seductive, it feels ‘safe’, but it risks giving the illusion of control. At the extreme, well-intentioned safekeeping simply becomes indiscriminate corporate hoarding, born more of fear than prudence. For as long as a financial institution continues to keep everything, it is sinking ever-larger investment into something that isn’t working.”
Eoin adds “the act of keeping everything by definition hides something that should not be hidden. The overwhelming fear of reprisal, the fear of criticism for taking action, means a gigantic record-keeping can is perpetually kicked down the road. It becomes an ever-expanding archive of stuff with no way of looking for the right thing, and no way of finding out what your priorities should be. Critically, lessons about the past are lost and obscured, records and context simply start to merge over time into a large, impenetrable custodial mass.”
Eoin suggests a better deployment of resources. “The purpose of record keeping is to evidence, to learn, to understand and interpret risk, and ultimately to be able to retrieve with precision,” he says. The right management of records can make any institution into a smarter business. “The data is part of the corporate real estate, its institutional memory, its culture. Understanding and interpreting the past is essential to its ability to evolve and improve. It cannot be left to grow over.”
To keep or not keep?
A large European bank said it wanted a system that could deal with all of the above, including how to save cost by reducing superfluous storage. Eoin suggested the first thing to do was to reverse the proposition. Ask not “what we should destroy?” – for records management, that’s not the right question to start with, neither is “how do we save money?” Ask instead “what should we retain, and why?” and “how do we prioritise investment, what is efficient, what are the lessons to be learned?”
“In a world of finite budgets and unflinching regulatory expectations of management accountability,” says Eoin, “the drivers behind the record keeping process need to be equally focused: What should I keep? Why should I keep it? Who owns it? How long should I keep it? What is the purpose of keeping it?”
There are many reasons to keep a record – legal requirements for contracts, local statutes or laws. There is also reason to keep records for longer if there is ongoing litigation, or if there is a regulatory enforcement action to be fulfilled – and likewise for an area in the industry coming under increased scrutiny or review.
Eoin’s client wanted all these requirements to be met, of course. Eoin knew that the first stage, before designing the system, was to identify all the stakeholders and get everyone comfortable with the change to come.
“This is TGP’s core philosophy: reassuring people and departments who very rightly have robust views on their own areas and requirements. We make the system work as a whole, by making sure we bring everyone together. And that means making sure that there is stakeholder buy-in across the board, that the right people feel involved, consulted, feel part of the process. Bottom line, we make it transparent enough so that everyone can see that it works and can be used.”
To do this, Eoin and his team had to penetrate the whole organisation, and connect all the parts together. As a father of four children under 12, perhaps Eoin knows more than most about negotiating between parties with entrenched and apparently competing interests.
“The quality of your ability to retrieve information is only as good as the index of all the information you have,” says Eoin. “The day you look to retrieve information, the quality of the index you are working with doesn’t get any better than the day it was created.
“And time is not your friend. When you are trying to piece together the past and fill in blanks in the inventory, context and people have been lost. This is why it is so important to focus on improving the current process, so you learn lessons and address the future while you are still grappling with retrieving the past.”
“It’s also important to be able to get to the right information in a pre-emptive way. AI can help, saving thousands of hours if you’re looking for something specific, but only if the information was correctly archived in the first place. Even then, trained humans can help pick up tone, verbal nuances, sarcasm, cynicism, remarks that become clear red flags when tone is understood, pre-empting problems before they blow up – and that means senior, experienced people using careful sampling techniques. It becomes an intelligent way of looking at the past and working out what to do in the future.”
Eoin and his team delivered for their client a methodical approach and a smarter investment. But they delivered something much greater than that. They helped to give the bank a better understanding of how to join up its thinking, in a way that made everyone feel included. Ultimately it became a tool with which to make better decisions about the business, not just the past. It became a better investment for the future.
| Where TGP can help
Current State – Consulting with Multiple Stakeholders – Mapping and Enhancing Existing Processes:
We will work with key client stakeholders in Legal (incl. Litigation and Divisional and local GCs), Compliance, IT, Business Representatives and Corporate Records Management to:
- Focus on priority business areas/locations for the client
- Assess current retention oversight and execution processes and policies
- Make specific, practical recommendations to enhance and improve processes, addressing both legacy (cataloging, retention and release), and forward looking (on-going archiving, cataloguing) processes
- Produce draft Record Retention policies for the client’s review as required to provide or to enhance a consistent formal framework and process
Records Retention Process Design:
- Legal: working with internal and external counsel, to make sure that legal issues and concerns for legacy record retention are carefully addressed, that the process enhances retrieval for future archives, and that the process as a whole is formally signed off by external counsel as being legally prudent, defensible and as meeting relevant regulatory requirements and expectations
- IT: to make sure that the Records Retention process design takes full account of their inputs, including practical constraints around technology investment priorities, and the client’s preferred software/vendor solutions
- Business Owners: to make sure that expectations are clear for the records retention process at the point of archiving (record creation), including consistency of cataloging and setting out clear roles and responsibilities. Ensure inputs and concerns re legacy records access and retrieval are fully integrated into enhanced processes.
- Other Second Line: Other key second line stakeholders to prepare a detailed overview, including flow chart for entire process, plus written explanation of approval processes and safeguards. These stakeholders will include CRO, CFO, and regulated positions (e.g., UK MLRO).
- Management/Governance: business management and governance forums (e.g., Executive Boards, Audit Committee, Management Committees and Legal Entity Management).
Records Review – Cataloging the Existing Archive:
Once an agreed framework is in place and has been approved, TGP will set up and resource a structured review process* within that agreed framework to carry out the necessary coal-face records reviews required to:
- Catalogue legacy material; and
- Move it formally through the agreed process to retention or release
Resourcing of Review of Legacy Material:
TGP will source all of the necessary resources in each location required to implement the detailed review required.
Ad Hoc Reviews:
TGP can provide cost efficient reviews – applying the same supervised processes and executing diligent, catalogued reviews with appropriately qualified resources – on an ad hoc basis as required to support litigation or other reviews, including reviews required by line management for specific areas or records’ inventories.
Staff Security – Enhanced Clearance:
TPG will also undertake that all staff working on this project go through appropriate enhanced background checks (as agreed with client) to make sure the client has the appropriate assurances in place (documented as necessary) concerning the level of clearance required to be able to review relevant categories of records