Fifteen years ago, when we started helping firms bridge the gap between technology and compliance things were simpler: companies had little data; everything was stored in-house on servers or users PCs, there was no such thing as mobile workers or sharing data with branch offices. More importantly, meeting 17a-4 was easy – firms simply burned all their records to a DVD (the original WORM disk by the way) and shipped it to the D3P and FINRA was happy. However, things changed so data compliance became complicated, especially for small firms.

What happened is around 2010 data volumes increased – drastically; so much that firms couldn’t backup to DVD anymore. Also, people wanted to work remotely from home & branch offices, yet the real challenges came with the introduction of cloud. For example, it became a viable option when G Suite was first introduced in 2016 with Microsoft 365 coming out soon after in 2017. Of course firms wanted to use the cloud to run their office. For example to store data , email, hosting backend applications, web conferencing and so forth. But firms feared putting everything in the cloud since it wasn’t 17a-4 compliant (at the same time, FINRA couldn’t grasp cloud compliance), as a result firms failed to fully embrace the cloud, then ultimately ended up using cloud services in addition to in-house systems. This meant data became dispersed with gaps in their 17a-4 archive: A big no-no when FINRA shows up and does their 17a-4 electronic records request and can’t reproduce a sample set of records from the archive going back 7 yrs.