Financial services enterprises need their own systems for ediscovery. Typically they devote substantial budget and workflow complexity to compliance systems but leave ediscovery as an afterthought, to be selected by outside vendors or law firms. Here, we explore why FinServ companies need in-house systems and on what values they should focus on during their evaluation.
Heavy Attention From Regulators
Challenges for financial services companies are growing quickly. White collar and regulatory enforcements are increasing over 2021 levels. The US, the G7, and other global community groups recently agreed to step up enforcement against corruption and money laundering with anti-kleptocracy regulations. In March, the SEC announced greater requirements for self-reporting on cybersecurity breaches.
This outsized attention from regulators stems from the sheer numbers, size, and global economic impact of financial transactions. Financial services companies typically rely on large compliance departments with in-house systems to manage the monitoring and reporting.
The Ediscovery Challenge for FinServ
But ediscovery differs from compliance because it requires analysis and synthesis of evidence combined from multiple sources: email, mobile devices, monitored and rogue messaging systems, customer accounts, and structured data.
Targeted investigations may be quickly contained. But they can just as quickly become brushfires, or they can escalate to full-fledged investigations or class actions. The ability to investigate internally and quickly self-report may make the difference between rapid resolution or consequences to reputation and stock price. So it behooves the company to have full ediscovery capability for those fast-moving targeted investigations.
How can FinServ companies rise to the challenge? What should they consider to manage ediscovery and self-reporting across data silos? The ediscovery process needs attention equal to compliance, not left to case-by-case outsourcing to vendors and outside counsel.
Scalability for a Uniform Approach
A routine FCPA investigation or whistleblower complaint may quickly spawn the need to look at dozens of custodians across multiple data sources. A project may need to scale from thousands to millions of documents and communications in days rather than weeks. Legacy ediscovery workflows simply do not cut it. Waiting to collect, copy, download, upload, process, index or move data just to start evaluating risk will compromise the strategic and tactical advantage that financial services companies need in this context.
Financial services companies need ediscovery tools that can rapidly scale to a variety of project sizes and data sources. Scalability requires that legal teams start review in hours or days, regardless of data size. It requires fast, direct, and native collection from sources such as Office 365, Teams, and Slack cloud repositories, email archives, and Cellebrite images of mobile devices. For the thousands of hours of recorded audio that is otherwise a black box to investigators, scalability requires automated machine transcription to searchable text. For the analysis of both approved and rogue messaging, scalability requires fast and full native processing of iMessage, WhatsApp, WeChat, Bloomberg Chat, and others.
Collaborating In-House and Outside
As in most industries, financial services counsel want to handle routine and brushfire matters in-house. But as brushfire investigations may grow quickly to something much larger, the in-house team needs to collaborate with outside counsel without making mid-crisis decisions about ediscovery platforms.
So, even at the brushfire level, in-house counsel should be equipped to perform full-featured analysis and reporting. For an opinion or expansion of scope, in-house teams should be able to bring in outside counsel at the flip of a switch and to be able to communicate securely within the platform. In-house and outside counsel can collaborate meaningfully when they can work together on analyzing key documents, assessing risk, building chronologies, preparing witnesses, and creating playbooks for self-reporting.
Flexibility is key. You may want your outside counsel to craft and manage your legal holds, or for in-house matters, you may want to do it yourself. Collaborative tools allow FinServe companies to pick the approach that best fits the particular needs of a matter, in cooperation with outside counsel, IT, compliance, HR, and business units.
Leveraging Work Product for Complex Projects
Sometimes, the same kinds of brushfires flare up in multiple locations. For example, a data breach or a marketing pattern of conduct investigation may spawn cases in multiple jurisdictions for which the company will want to coordinate responses that are similar but not necessarily identical. Legacy ediscovery platforms do not easily accommodate. Rather than providing economies of scale, they require extra time and expense to store ever-increasing copies of data and to transfer work product among them.
For coordinating these cases and managing MDLs, a financial services company needs a modern ediscovery platform with streamlined data models and excellent engineering. As the project becomes more complex, the legal team must easily be able to add new coding fields and customized metadata. The company should be able to utilize a one-to-many data model that easily leverages the same data and attorney work product across multiple projects.
Identifying Risk With Advanced Analytics
Communications in financial services are rich with industry jargon, slang, memes, emojis and gifs. Experienced financial services investigators appreciate the need to identify risk in the context of cryptic communications. Being able to search in milliseconds and to visually cluster similar results in minutes can make the difference between isolating risk in days versus slogging through weeks of review. Having these tools in-house allows corporate counsel to bring their institutional knowledge to bear quickly, to identify the messages that matter most, whether independently or in concert with outside counsel.
Having active learning, TAR, and predictive coding available in every project increases the legal team’s tactical advantage in identifying risk and saving time and money. Integrating visual analytics into the same platform for review lets the legal team identify hot spots in the data collection after just minimal machine learning.
Ensuring Privacy, Security, and Global Reach
Financial services enterprises sit atop vast amounts of customer PII, or personally identifiable information. When that data is subject to production in a litigation or investigation, the ediscovery platform has to provide the legal team with robust tools to maintain the privacy of customers and the confidentiality of proprietary information. Those tools must include complex pattern searches for PII and the ability to perform large-scale batch redactions, inverse redaction, metadata redaction at the time of coding, and native redaction of spreadsheets, audio and video files.
Because of the PII and the transactions at stake, the financial services industry has, among industry silos, perhaps the greatest concerns for cybersecurity. Customers, shareholders, and regulators expect that security is consistent with ISO-27001, FedRAMP, UK Cyber Essentials Plus, SOX, and SOC.
Last, but not least, consider that growth, success and resilience in financial services require that they operate internationally. It may be au courant to say that globalization is waning, but in fact the opposite has proven true. Cross-border operations are the norm for financial services organizations of any type or size, and the ediscovery capability needs to accommodate investigations and dispute management particularly in the US, UK, the EU, Canada, and Australia.
How Everlaw Does It Better
Everlaw is the world’s most advanced ediscovery platform. Our commitments to constant innovation and excellent customer support have made Everlaw a fast-growing favorite with financial services companies and our features check every box in this article, allowing corporate legal teams to transform their approach to discovery and investigations while keeping their data secure and within their control.
See how leading FinServ organizations are using Everlaw to solve the ediscovery challenge. Sign up for a demo today.