They were reasserting their privacy rights, which makes the registry a high point of the consumer protection movement.
But in the parallel corporate universe, “do not call” has a flip side that might be termed “you must be recorded.” Following a barrage of new corporate governance requirements, including last year’s Sarbanes-Oxley Act and policies stemming from the securities industry’s conflict-of-interest cases, corporations are increasingly inclined to record and retain in storage almost everything that happens in their digital realms -- over their telephone and computer networks, on Web pages and via e-mail -- not to mention the old-fashioned paper documents that they have long maintained in conventional filing systems.
“Companies have learned an expensive lesson,” observes Robert Gomes, president and CEO of Austin, Texasbased Renew Data Corp., a two-year-old technology firm that helps corporations retrieve legal evidence buried in old backup tapes. Companies that have gone through costly data-discovery exercises, he adds, vow “not to let it happen again.”
Privately held Renew Data is but a small part of an emerging content management industry that researchers at Framingham, Massachusettsbased International Data Corp. estimate will generate some $6 billion in annual revenues by 2007. Palo Alto, California, consulting firm Radicati Group says e-mail archiving alone will be a $1.4 billion-in-sales market by 2007, up from $164 million in 2003. Needham, Massachusettsbased financial industry research firm TowerGroup says securities firms are spending as much as $375 per employee per year for e-mail archiving and surveillance, which can add up to $15 million annually at a large firm.
This wave of data collection and storage is the culmination of a trend introduced years ago with the standard disclaimers on customer service lines: “Your call may be monitored for quality assurance.” Nice Systems, a 16-year-old Israeli company, is responsible for many of those digital recording systems. Its customer base includes the world’s ten largest banks, and many are adopting a “total recording” regimen, says Ian Ehrenberg, head of sales and marketing at Nice’s U.S. office in Rutherford, New Jersey.
Every retail customer call to J.P. Morgan Chase & Co., for example, is recorded. Supervisors do both systematic searches and spot checks to make sure that operators are responding courteously and complying with internal rules and regulatory policies.
“It’s not Big Brother,” asserts Ehrenberg. “Companies use this as they see fit, but most importantly it protects the consumer.”
Financial companies are now deploying Nice’s and others’ technology to monitor both external and internal conversations and, even more critically in the wake of new securities industry archiving rules, Web-based audio and video, e-mail and instant messaging. The latter has posed a particularly thorny problem for brokerages, which initially had tried to prohibit employees from doing business over public, unarchived systems like AOL Instant Messenger.
That security gap is closing. Firms such as Bear, Stearns & Co. and Merrill Lynch & Co. have turned to Waltham, Massachusettsbased IMlogic to overlay instant-message security on top of existing e-mail archives from companies like Iron Mountain and Zantaz. “Organizations are implementing these solutions enterprisewide because they’re recognizing that secure messaging and records management are core business needs,” says IMlogic CEO Francis deSouza.
Iron Mountain, a Boston-based company that got its start in 1951 storing corporate documents inside an old Pennsylvania iron mine, has morphed into a digital recordkeeping outsourcer and consultant. One customer, Hornor, Townsend & Kent, a Horsham, Pennsylvaniabased subsidiary of Penn Mutual Life Insurance Co., credits a year-old Iron Mountain system with streamlining oversight of its 1,600-member sales force.
A compliance staff of five usually needs less than two hours to scan 6,000 to 10,000 daily messages in the online archive for anomalies. “We’ve had only three or four communications that required us to send notices out to the reps,” reports Hornor Townsend compliance chief Charles Bennett. “We haven’t had anybody make the same mistake twice.”
