Beyond Compliance: Why Financial Institutions Need Smarter Retention and Cross-Functional Governance

Financial institutions operate in an environment where information is everything—and everywhere. Whether it’s trade confirmations, customer communications, or loan documents, the value of these assets depends on how well they’re captured, classified, protected, and eventually, disposed of.

In this climate, information governance (IG) is no longer a checkbox exercise. It’s a strategic function that determines whether institutions can operate efficiently, respond quickly to audits and litigation, and demonstrate to regulators that they take privacy and risk seriously.

And in today’s regulatory environment, over-retention is as dangerous as under-retention.

Retention Without Justification Is a Liability

Until recently, the industry default was to “keep everything”—a response to growing litigation risk and regulatory uncertainty. But with evolving privacy laws like CCPA, GDPR, and GLBA, that posture now creates more problems than it solves. Institutions must now justify retention—and equally, justify deletion—with defensible policies that demonstrate compliance and accountability.

A thought piece from Deloitte’s Information Governance team underscores the urgency: organizations must have “strategic approaches to managing, using, and disposing of information,” particularly in light of state and regional privacy regulations that impose strict fines and reputational risk for noncompliance.

The bar has moved. Regulators are no longer asking if your data is protected—they’re asking whether it needs to be there at all.

Why IG Must Be Cross-Functional

No single department owns the data lifecycle. Legal may care about holds and disposition. IT manages infrastructure and access. Privacy handles purpose limitation. Compliance enforces policy. Business units create and use the data. Without a cross-functional governance team, these priorities rarely align.

That’s why leading institutions are forming IG steering committees composed of stakeholders from Legal, Compliance, IT, Records, Privacy, and business operations. These groups:

• Determine how data is captured, classified, maintained, and used.

• Establish retention schedules based on law, risk, and business value.

• Develop auditable procedures for deletion, access, and search.

• Address gaps and redundancies through data minimization strategies.

Deloitte notes that successful IG strategies are “sustainable, agile, and scalable”—adaptable to changing regulations, evolving technologies, and shifting business needs.

The Cost of ROT (Redundant, Obsolete, Trivial Data

According to CGOC, 69% of a typical company’s data is ROT, 25% has marginal business value, and only 5% is subject to retention obligations. Deloitte’s clients confirm this: in a recent engagement with a specialty insurer, 10% of its stored data was immediately identified for defensible disposition after metadata analysis.

ROT isn't just dead weight—it’s toxic. It:

• Inflates storage and infrastructure costs,

• Obscures valuable content, making audits and litigation more complex,

• Introduces risk, especially when stale data contains personal or regulated information,

• Weakens client trust by exposing outdated or irrelevant insights.

ROT is digital debris—and without strong governance, it accumulates fast and then pollutes the environment, sometimes indefinitely.

Privacy Laws Demand Purpose-Based Retention

The danger of keeping ROT has increased exponentially with the requirements of new privacy laws!

The question is no longer “how long can we keep it?” but rather, “do we still have a legitimate reason to retain it?”

According to Deloitte, modern IG frameworks must align with “regulatory requirements for control over information as well as retention and disposition practices.”

This means:

• Mapping retention periods to legal authority and business need,

• Automatically deleting expired data unless a legal or operational reason justifies keeping it,

• Minimizing data during system decommissioning, migration, or M&A,

• And documenting every decision—because when regulators ask, your policy isn’t enough. They want proof of practice.

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The IG Tools Every Financial Institution Needs

Based on commonly recognized information lifecycle models, effective IG relies on a coordinated mix of people, processes, and tools:

1. Retention Schedule and Policy Management: Regularly reviewed and updated to reflect current legal requirements, operational changes, and privacy constraints.

2. Enterprise Taxonomy and Metadata Architecture: Deploying a coherent enterprise-level taxonomy and metadata architecture helps classify data consistently and supports automation for search, legal hold, and deletion.

3. Automated Retention and Disposition Systems: Reduces reliance on manual processes while creating audit trails for regulators and internal controls.

4. Analytics and ROT Discovery: Advanced metadata scoring and analytics help pinpoint low-value content and defensibly dispose of it.

5. Cross-Functional Governance Programs: Embeds IG roles, responsibilities, KPIs, and escalation paths across Legal, IT, Privacy, and the business.

   
   

IG as a Service—and as a Culture

In one Deloitte case study, a multinational biotech firm developed an enterprise-wide IG roadmap based on stakeholder interviews, policy reviews, and document inventory. The result: a streamlined records policy and clearer classification framework, rooted in business value and retention law.

But beyond roadmaps and systems, IG must become a cultural commitment. That means:

• Role-specific training for frontline employees, IT, and contractors,

• Regular audits of access, permissions, and data movement,

• Vendor controls that extend governance obligations across your digital ecosystem.

And, at the end of the day, as Deloitte notes, IG is not about technology alone. It’s about “aligning policies, tools, and behaviors to deliver operational efficiency, privacy compliance, and improved decision-making.” Information Governance professionals play a pivotal role in bridging legal, compliance, IT, and business priorities to ensure data is handled responsibly across its lifecycle. They design and enforce the frameworks—policies, retention schedules, training, and audits—that make defensible data use not just possible, but sustainable.