"Hello. We'd like to see your data because we heard that some of your guys are colluding to manipulate interest rates."
Did your heart stop? For many firms these very unwelcome words not only hold the potential for regulatory punishment, but guarantee hours upon hours of expensive eDiscovery.
This used to mean culling through emails and phone records, but times have most certainly changed. Most organizations will use up to eight communication channels to conduct dialog with customers, "and that's not even a lot," says Scott Whitney, SVP Product Management of Actiance, an enterprise platform provider for communication and social media governance. Basic media channels include phone, email, Skype, LinkedIn, Twitter, Jive...
What's more, there's a rising trend in internal enterprise social networks, which appeals to workers who are into sharing and broadcasting their work to establish credibility in organizations. A Forrester report, "Enterprise Social And Compliance Combine To Deliver Value" found nearly half of enterprises today have deployed (28%) or are planning to implement (18%) enterprise social systems. 29% of firms reported they were interested but had no immediate plans to adopt a enterprise social networking.
In some preliminary research, Forrester also found 65% of enterprises have deployed or are considering deploying a community system for employees and customers.
Can firms guarantee the credibility of all those social archives?
Whether it's in response to regulatory compliance, corporate compliance or eDiscovery requests companies have an obligation to preserve all communications. "It's not simply about creating another e-mail anymore," he says. "Multiple [communication] formats are driving business, you have to have a way to preserve records and indicate transparency when dealing with compliance."
Whitney estimates more than 50 percent are looking at for a new information archive that helps preserve the file integrity across events. After all, it wasn't so long ago that a $3.75 million fine was handed down to Barclays for failing to properly archive electronic records.
The eDiscovery Headache
It's much easier said than done. Many systems today have still not evolved beyond e-mail archiving. To bypass the issue a single Facebook post with 30 comments will be achieved as 31 separate e-mails. The structure and unique context of the conversation is lost, flattened into an e-mail template.
For someone trying to trace a discussion, typically an attorney being billed thousands of dollars per hour (time is money!), that's a lot of time spent opening files and reconstructing the flow of communication.
There's also the issue of filtering the noise. "Now that I've got data on hold for requisition, I only want to give data relevant to matter," explains Whitney. "I don't want to give too much because there might be things they can imply and use against me. Nor do I want to give too little and risk opening myself up for sanctions. I want it to be just right, and the way you do that is called Culling Down."
For example, if the firm has one thousand communications related to issue, from social data on LinkedIn to e-mails with supervisors and the in enterprise social system, someone's task is to comb through it all. Typically, it falls to the responsibility of a pricey attorney. "Somebody has to sit in a chair and make sense of thousands of objects, get to the core, and cut it down to hand over to opposing council."
But what's most damaging for companies under question is the users' ability to manipulate data. It doesn't have to be malicious to be wrong. Unlike a deployed e-mail which is unchangeable once sent, a blog post may be modified, a comment deleted, a message reworded. If there is no system to track changes, an advisor working on a legal recovery request may never know if the analyst's original post was modified.
Major financial firms are allocating billions of dollars to litigation expenses in the 2014 fiscal budgets. Actiance hopes to make a dent in that figure with the newly announced Alcatraz platform, labelled the first context-aware information archive purpose-built for social.
According to the release, "Alcatraz takes a completely different approach, starting from the construct of social content - retaining and retrieving content, even edits and deletes, as fully threaded, contextual conversations – and incorporating this alongside email."
"The solution also provides the ability to replicate what a blog or discussion board looked like at a particular point in time. This makes it easier, faster, and more cost-effective for auditors, attorneys, and litigation support staff to find and assess content with greater accuracy and confidence, ultimately simplifying legal reviews and ensuring timely responses to discovery requests."
By organizing content into conversations and aggregating all posts within in a single document like a social journal, the RAND Institute for Civil Justice estimates legal costs go down by 36%. Whitney believes that is a conservative estimate.