Why Is Data Retention Important?

Storing company documents securely is crucial for protecting data and meeting legal requirements. Important documents like personnel files and tax records must be kept according to regulations to prevent future issues. Let's dive into data retention periods in individual industries. Healthcare: HIPAA Guidelines for Patient Data Retention HIPAA, Health Insurance Portability and Accountability Act, is designed to protect the privacy of an individual's health information and ensure the secure exchange of health information among covered entities and their business associates. This is important for anyone handling sensitive health information in the healthcare system. There are a couple of reasons what are HIPAA’s data retention guidelines are essential for healthcare organizations: managing patient data properly, ensuring compliance and safeguarding privacy.  HIPAA doesn’t set specific retention periods for medical records. However, it requires that sensitive patient data must be kept for at least six years. In order to avoid costly fines and reputational damage, healthcare organisations have to adhere to HIPAA’s retention rules. Organizations have to retain documents like patient consent forms, security assessments, and incident reports.  This helps them demonstrate that they care about data privacy and security, especially during audits or lawsuits. In addition to being important for regulatory compliance, proper data retention helps with better organization and protects patient privacy. HIPAA applies to various organizations handling Protected Health Information (PHI), including healthcare providers, telemedicine providers, health insurers, and healthcare clearinghouses. These entities, along with their Business Associates (such as billing providers and IT services), must comply with HIPAA retention rules and state-specific regulations. HIPAA covers a range of data types for retention, including medical records, billing records, PHI risk analyses, security policies, audit logs, and documentation related to security breaches and incidents. Each organization must securely store and eventually dispose of this data following the appropriate retention periods to ensure compliance.  For a more streamlined way to handle this, consider using tools like KORTO to automate the data management process and stay compliant with regulations.   Finance and Banking When determining the retention periods for tax and financial documents for entrepreneurs, we can say that the most important regulations are: Accounting Act General Tax Act Regulations on Accounting Retention periods for accounting documents: Documents on the basis of which data were entered into the journal and general ledger, and subsidiary books, are kept for at least 11 years. Payrolls, analytical records of salaries for which mandatory contributions are paid are kept permanently. A taxpayer may decide to store documentation outside the borders of the Republic of Croatia. This rule applies only if the country in which he wants to store the documentation is a member of the European Union. Regardless of where the taxpayer stores the documentation, he is responsible for it at all times, and is obliged to make it available to the competent supervisory authorities at all times, upon their request. Without documentation, it would not be possible to subsequently verify the veracity of business events and their tax impact. For this reason, every taxpayer is obliged to keep business documentation that is generated in the course of business operations within the deadlines prescribed by accounting, tax, customs, foreign exchange, and other regulations, so the question often arises as to what are the deadlines for keeping individual business documentation. An entrepreneur may also store business documentation in electronic form. An entrepreneur who stores business books using electronic devices that guarantee online access to data must, upon request, provide the supervisory authority with the right to access, download and use these business books. After the deadline for storing documentation has expired, taxpayers may not destroy the documentation on their own, and everything is defined in the Act on Archival Materials and Archives, so this must be taken into account before you decide to destroy the documentation and study the aforementioned Act. Legal and Law Enforcement: Data Retention for Cases and Evidence Different regulations prescribe different retention periods for individual documents. If this is the case, the documents should be kept for the longest prescribed period. For documents whose period of data retention is not prescribed by law, the entrepreneur should determine the retention period himself by internal act. In the legal and law enforcement sectors, data retention is critical for case management and evidence preservation. Criminal evidence, case files, and investigation records must be retained for several years or even indefinitely in some cases. Business books (journal and general ledger, and subsidiary books) are kept for at least 11 years. The retention period for business books begins on the last day of the business year to which they relate. Financial statements, annual reports, and audit reports (if the business is subject to audit obligations) are kept permanently in their original form. Keeping track of this can be tough without the right systems in place, so it’s important to have best practice methods for managing data retention across cases. Retail and E-commerce Customer data retention is necessary for customer service, order fulfillment, and compliance with tax regulations. Transaction records and personal information must generally be kept for a minimum of five years. However, businesses also need to comply with data protection regulations like GDPR, which limit how long personal data can be stored unless there’s a clear and justifiable reason. Proper data retention helps in handling customer inquiries, returns, and protecting consumer rights. Education: FERPA Rules for Student Data Retention Protecting students' information is a priority in the education sector. FERPA, the acronym for Family Educational Rights and Privacy Act, sets the rules for data retention. Based on this law student records are kept private. FERPA outlines how long certain records must be retained. For example, grades and transcripts usually need to be kept for several years, while discipline records might have shorter retention periods. The Role of Data Retention in Protecting Customer Privacy Data retention is crucial for businesses across all sectors, from healthcare to finance, legal, retail, and education. Understanding industry-specific retention requirements ensures compliance, security, and efficient data management. Automating the process with tools like Korto helps meet regulations and boost efficiency. By following best practices, and a policy example, businesses can protect data, stay compliant, and build trust with clients.;

The server room at Goldman Sachs' Manhattan headquarters tells a story about modern data challenges. Rows of blinking drives store millions of transactions, emails, and client records – some dating back to the 2008 financial crisis.  Down on Wall Street, regulators sift through JP Morgan's trading records from 2019, part of an ongoing investigation. Across town, a startup frantically searches for deleted customer data needed for an audit. These snapshots from New York's financial district highlight why data retention keeps CEOs awake at night. The rules seem straightforward: keep what matters, delete what doesn't. Yet in practice, managing corporate information has become as complex as the skyline outside those server room windows. Take Marie Chen, Chief Information Officer at a midsize bank in Chicago. "Ten years ago, we worried about storing too much," she explains. "Now we worry about deleting too soon." Her team recently paid $50,000 in emergency recovery fees after accidentally purging documents needed for compliance. They're not alone – improper data handling cost financial firms over $2 billion in fines last year. The stakes extend beyond banking. Healthcare providers juggle patient records that must be kept for decades. Law firms archive case files that could become relevant years later. Tech companies balance user privacy against business intelligence. Each industry faces its own maze of regulations, risks, and requirements. This isn't just about hoarding digital files. Smart retention policies help organizations navigate treacherous waters between regulatory compliance and operational efficiency. Companies that get it right protect themselves from legal troubles while keeping storage costs manageable. Those that don't? They join the growing list of cautionary tales in business journals. Why data retention policies are essential The 2023 Equifax data breach, resulting in an $800 million settlement, highlighted why robust data management matters. Companies failing to implement proper retention strategies face severe consequences. Morgan Stanley's $60 million fine in 2024 for improper data disposal serves as a stark reminder. Key drivers making retention policies essential: Banking sector examples show the impact: Deutsche Bank saved $4.8 million annually through strategic data disposal Goldman Sachs reduced storage costs by 35% after implementing retention automation JPMorgan's compliance response time dropped from weeks to days Beyond cost savings, effective policies protect organizations. When the SEC investigated trading irregularities in 2023, firms with structured retention policies provided evidence within 48 hours. Those without proper systems took up to six weeks, facing additional scrutiny and fines. Here you can check an example of data retention policy, which outlines how businesses can structure their retention strategies effectively. How to create a robust data retention plan? Creating an effective plan requires understanding organizational needs and regulatory requirements. The healthcare provider Kaiser Permanente revamped their retention strategy in 2023, offering valuable insights into best practices. Essential components include: Inventory current data assets Identify regulatory requirements Define retention schedules Establish disposal procedures Implement automation tools Organizations should consider implementing an EDMS to streamline these processes. DMS in business helps significantly, with modern solutions offering AI-powered classification and automated retention enforcement. Critical success factors from real implementations: Executive sponsorship Clear ownership of data categories Regular employee training Documented exception handling Periodic policy reviews Types of data and their retention needs Different data types require varying retention approaches. Understanding what information is and its true value helps determine appropriate retention strategies. Financial Records: Transaction data: 7 years minimum Tax documents: IRS requires 3-6 years Audit reports: 10 years standard Healthcare Information: Patient records: 7-10 years post-last visit Insurance claims: 6 years minimum Clinical trial data: 25 years Employee Data: Personnel files: 7 years post-termination Payroll records: 3 years minimum Benefits information: 6 years Each category requires specific consideration of its retention period based on regulatory requirements and business needs. Organizations like Deloitte implement tiered retention schedules, adjusting storage methods based on access frequency and compliance needs. Policy compliance and legal considerations Recent regulatory changes have intensified compliance requirements. The EU's GDPR imposes fines up to €20 million or 4% of global revenue for violations. California's CPRA expanded consumer rights regarding data retention and disposal. Key compliance areas: Documentation of retention decisions Regular policy reviews Employee training programs Audit trails Disposal certificates Legal requirements vary by industry and jurisdiction. Financial institutions under SEC regulation 17a-4 must maintain certain records in non-erasable formats. Healthcare providers face strict HIPAA requirements for patient data retention. Does KORTO offer a long-term data retention solution? KORTO provides comprehensive data retention capabilities designed for modern business needs. Their platform addresses key challenges organizations face in managing long-term data retention through sophisticated automation and intelligent classification systems. The platform's impact on organizations has been substantial, with users reporting significant improvements across their operations. Storage costs typically decrease by 40%, while compliance reporting speeds up by 60%. Organizations have seen manual classification errors drop by 85%, and their ability to respond to audits has improved dramatically, with response times cut by 95%. A recent implementation at a European bank showcases KORTO's practical benefits. The bank completed their deployment in just three months, achieving full compliance with EU regulations while seamlessly integrating with their existing Microsoft 365 environment. The system successfully automated the classification of 2 million documents, dramatically reducing the need for manual processing and improving accuracy rates. KORTO brings together artificial intelligence and solid security to smartly handle retention management. This platform automates policy enforcement and keeps detailed audit trails. How cool is it to have proof ready whenever compliance checks come up? Need to slip retention management into your current work processes? KORTO’s flexible options help you do just that—no messy disruptions to deal with. Thinking about giving your retention practices a makeover? KORTO hits the nail on the head by meeting tricky regulatory needs while cutting storage costs and boosting efficiency.  The platform's intelligent approach to document management ensures that retention policies are consistently enforced, while its automated systems reduce the administrative burden on staff. The future of data retention requires solutions that can adapt to evolving regulatory requirements while managing ever-growing volumes of data. KORTO's platform enables organizations to meet these challenges head-on, providing the tools needed to maintain compliance, control costs, and improve efficiency in an increasingly complex regulatory environment. Contact KORTO today to learn how our enterprise content management platform can improve your organization's approach to data retention and compliance.  ;

The transformation from doing everything manually on the paper, to now us just pressing a button and automating everything, has fundamentally changed how organizations handle their records.  In 2023, companies generated an average of 1.4TB of data per employee annually, making effective data retention policies crucial for business operations. Organizations that neglect proper data management risk compliance violations, increased storage costs, and potential data breaches.  Recent studies from McKinsey reveal that companies with robust data retention practices spend 30% less on storage and reduce their risk of compliance violations by 45%. Determine retention periods Financial firms learned hard lessons about retention periods during the 2008 crisis. Many lacked crucial documentation when regulators came knocking. Today, smart organizations take a nuanced approach to data retention periods, moving beyond one-size-fits-all policies. When examining retention periods, a nice policy example comes from JP Morgan which shows how leading organizations approach this challenge: They maintain trade records for 7 years to satisfy SEC requirements, while keeping strategic planning documents for 10+ years due to their historical value. Their risk assessment team regularly evaluates retention costs against potential legal and operational needs. The IRS requires tax records for 3 years, but fraud investigations can extend to 6 years or more. Manufacturing companies often retain product specifications and quality control records beyond standard periods, protecting against future liability claims. Toyota, for instance, maintains vehicle design and testing records for 30 years after production ends, following costly lessons from past recall incidents. Industry-specific retention requirements add another layer of complexity. Healthcare providers must navigate HIPAA's varying retention periods: Adult patient records: 6-10 years from last visit Pediatric records: Until patient reaches 21 plus statute of limitations Diagnostic images: 5-7 years, depending on state regulations Medicare/Medicaid records: 10 years from last date of service Implement data classification Data classification has evolved significantly since the days of simple "confidential" stamps. Modern classification requires sophisticated frameworks that account for regulatory requirements, business value, and privacy implications. A major healthcare provider recently revamped their classification system after a costly HIPAA violation. Their new approach includes: Primary classifications based on PHI content Secondary tags for research value Retention triggers linked to last patient contact Department-specific subcategories The financial sector provides another instructive example. Goldman Sachs implements a six-tier classification system: Ultra-restricted: Board materials and strategic acquisitions Highly confidential: Trading algorithms and risk models Confidential: Client information and internal reports Internal use: Operational procedures and training materials Public: Marketing materials and press releases Transient: Temporary work products and drafts Automate retention policies The role of DMS in business has evolved significantly as manual retention management became obsolete. When Microsoft Teams started generating 1.5TB of meeting recordings weekly for a mid-sized company, modern organizations learned they must automate to survive.  A recent IBM study found that organizations using automated retention systems reduce compliance costs by 35% and improve response times to regulatory inquiries by 60%. Real-world automation benefits: A pharmaceutical company reduced compliance reporting time from 2 weeks to 3 days A legal firm eliminated 85% of manual classification errors A government agency saved $400,000 annually in storage costs through automated disposal A retail chain reduced data breach risks by automatically encrypting and disposing of customer data Successful automation implementations focus on: Integration with existing workflows Clear escalation paths for exceptions Regular system audits and updates Employee training and change management Measurable performance metrics Ensure data security and privacy The Colonial Pipeline ransomware attack highlighted the critical nature of data security. Organizations must move beyond basic password policies to comprehensive security frameworks. Deutsche Bank's approach demonstrates modern security best practices: Granular access controls based on job functions Regular penetration testing by third-party firms Encryption requirements that exceed regulatory minimums Multi-factor authentication for all data access Continuous monitoring for unauthorized access attempts Security measures must evolve with emerging threats. Recent trends include: Zero-trust architecture implementation Blockchain for immutable audit trails AI-powered threat detection Data loss prevention (DLP) solutions Regular security awareness training Regular audits and reviews Wells Fargo's $3 billion fine in 2020 underscores the importance of regular compliance audits. Effective review processes catch issues before they become systemic problems. Key audit components from successful organizations: Quarterly compliance sampling Annual policy reviews with stakeholder input External auditor assessments Documentation of audit findings and remediation efforts Gap analysis against industry standards Proactive organizations conduct targeted audits focusing on: Classification accuracy rates Retention period compliance Access control effectiveness Data disposal procedures Employee compliance training completion The future of data retention lies in intelligent systems that adapt to changing regulatory requirements while reducing administrative overhead. Organizations that embrace modern ECM solutions position themselves to handle growing data volumes while maintaining compliance. Studies indicate that companies using advanced ECM platforms achieve 40% faster regulatory response times and reduce data management costs by up to 25%. Improve your records management with modern solutions Organizations face mounting pressure to modernize their records management systems. The growing complexity of regulatory requirements, coupled with exponential data growth, makes traditional approaches increasingly risky.  Research from Gartner indicates that organizations using outdated records management systems spend 2.5 times more on compliance-related activities and face a 70% higher risk of regulatory violations. Major pain points that modern organizations face include: Manual classification errors leading to compliance risks Inconsistent retention policy enforcement across departments Difficulty managing hybrid cloud-based storage environments Increasing costs of regulatory reporting and audits Challenges integrating with existing business systems Leading organizations are addressing these challenges by implementing enterprise content management platforms that offer: AI-powered classification reducing manual effort by up to 85% Automated retention policies ensuring consistent compliance Secure cloud storage with advanced encryption Seamless integration with Microsoft 365 and other business tools Comprehensive audit trails for regulatory reporting KORTO addresses these needs through its advanced features: Records lifecycle management from creation to disposal EU (eIDAS) and US (ESIGN, UETA) regulatory compliance Integration with standard file shares and Microsoft 365 products AI-enhanced classification with manual oversight options Secure APIs for business system integration Organizations using KORTO's platform report: 40% reduction in time spent on compliance activities 60% decrease in classification errors 35% lower storage costs through efficient retention management 75% faster response to audit requests Take the first step toward modernizing your records management. Schedule a consultation with KORTO's experts to discover how our enterprise content management platform can transform your organization's approach to data retention and compliance.;

Organizations generate large amounts of data daily, but not all should be kept indefinitely. A retention period defines how long data is stored before deletion or archiving. These periods depend on industry regulations, business needs, and legal requirements. Clear retention policies ensure efficient record management and compliance with data protection laws. Retention periods apply to various types of data, such as: Financial records – invoices, tax documents, and payroll reports Customer data – personal details, transaction history, and support logs Employee records – contracts, performance reviews, and payroll pieces of information Legal documents – contracts, agreements, and compliance reports Understanding the importance of retention periods ensures proper data governance and risk mitigation. Why retention periods matter? Retention periods are crucial for businesses to ensure: Legal and Regulatory Compliance: Data retention requirements by industry vary, and failure to comply can result in heavy fines and legal issues. Data Security and Privacy: have in mind that outdated or unnecessary data that you keep increases the risk of security breaches. Proper data retention policies may help reduce vulnerabilities by ensuring sensitive information is not kept longer than needed. Optimized Storage and Cost Management: Storing excessive amounts of data can be costly. Regularly purging outdated records helps optimize storage space and reduces operational costs. Efficient Data Management: Retention policies enable businesses to categorize and manage data efficiently. It ensures that relevant information is easily accessible while reducing clutter. Litigation Protection: Retaining data for the appropriate period helps organizations protect themselves during legal disputes, as they can provide necessary documentation when required. Under GDPR, personal data storage must follow key principles, including storage limitation—data should only be kept as long as necessary for its original purpose. This prevents indefinite processing and ensures organizations set clear retention periods based on legal and operational needs. How to determine the right retention period? It is very challenging to determine when data should be stored or deleted. The GDPR doesn't specify an exact retention period. However, it states that it should be limited to what is necessary for the data's intended purpose. Carefully evaluating the following factors helps determine the appropriate retention period: Regulatory Requirements: Different industries have specific legal requirements regarding data retention. Business Needs: Data that holds value for analytics, customer insights, or operational processes may require extended retention. However, businesses should balance retention with security risks. Data Sensitivity: Highly sensitive data should be retained only as long as necessary to prevent security risks. Litigation and Audits Organizations must consider potential legal claims and audits when setting retention policies. Maintaining records for the recommended period ensures businesses are prepared for any inquiries. Automation and Technology Leveraging modern software solutions, like KORTO, can automate retention processes, ensuring data is securely managed and disposed of when necessary. Best practices for managing retention periods To implement effective retention policies, organizations should follow these best practices: Develop a clear retention policy example, Categorize data by importance, Digitization: Where possible, store documents in digital form, making them easier to manage and access. Automate Data Management: Use tools like KORTO to automatically handle data storage and deletion. This reduces mistakes and helps you follow the rules. Update Your Policies Regularly: Data retention rules can change, so it's important to check your policies from time to time to make sure you're still following them. Teach Your Team About Data: Regularly educate employees on the principles of secure document storage and management. Delete Data Securely: When data is no longer needed, make sure it’s safely deleted or archived so no one can access it without permission. Achieving better organization with secure document storage Efficient and secure document storage requires careful planning, understanding applicable regulations, and applying best practices.  Whether it is storing medical, accounting, or other documents, the key to success is the right approach at the organizational and technological level. Let's remember that proper document storage not only protects us from legal consequences, but also forms the basis for building trust and professionalism in any organization.;