When it comes to forward-thinking leadership and innovation in compliance, much of the world has their eyes on Australia. Australia is widely considered to be at the forefront of finance compliance, due in large part to their VERS standard. So what is VERS? And what can those in the American financial industry learn from it? Let’s take a look.
VERS at Its Most Basic
Since its inception in 1995, the Victorian Electronic Records Strategy (VERS) has helped a multitude of industries manage, store, and access their electronic records by setting mandatory standards for the preservation of digital records for the long-run. Many industries have already adopted VERS, or are actively moving toward it, including government departments, schools, private businesses, public hospitals, and the finance industry.
Challenges in Digital Record Preservation
Organizations throughout the world face significant challenges when it comes to creating permanent plans for storing electronic records. Not all documents are active, and companies don’t always know what to do when they get to a point in their disposition cycle where documents are not needed in day-to-day business, yet must be preserved for a variety of regulatory reasons. The challenges in preserving them include:
- Loss of context
- Media failure
- Loss of recordkeeping systems
- Program obsolescence
VERS was created as a way to solve document preservation challenges. The standard creates a specific metadata scheme that retains the basic data for an electronic record, which aids in the preservation of context even when many years have passed. It relies on a system-independent approach based on XML instead of a specific format like Word or PDF.
VERS Mandates 5 Specifications
In order for a recordkeeping system to be considered compliant with VERS it has to satisfy these five specifications:
- The system must perform in such a way that it will preserve the digital records for an extended period of time.
- The metadata must conform to VERS.
- It must be saved in the VERS standard electronic record format.
- The data must be formatted in such a way that it’s acceptably suitable to represent documents for an extended period of time.
- Certain standards must be met involving approved media and mechanisms used to export the records.
Businesses Benefit from VERS
In the United States, neither the financial services industry nor any other industry must abide by VERS. In fact, even in Australia, government agencies are generally the only organizations required to adopt VERS. However, there are significant advantages for companies that adopt this or a similar set of standards.
- VERS makes it possible for companies to move toward a truly paperless office, resulting in a significant reduction in costs
- Money is saved when organizations can respond faster to requests from clients, employees, external auditors, and internal auditors.
- The cost of transferring records is reduced and in many cases completely done away with.
- Risk diminishes. Capturing and maintaining digital records allows companies to ensure they’re maintaining accurate and authentic documents.
- Improved accountability and increased transparency can be more easily achieved.
- Recalling archived records takes much less time. Organizations that rely on paper storage can wait weeks to have a file pulled from a warehouse, while those with digital archives can access those same documents almost instantly.
- The discovery and reuse of records are both improved.
VERS Makes Retention Simple
One of the biggest struggles organizations have as they move to a digital archive system is figuring out which rules they need to follow. Many regulations are full of gray areas and in many cases are only recommendations, not regulations per se. VERS makes the transition to a digital archive simple by providing clear, detailed guidelines.
Consider their rules for the destruction of original source records as an example. If a record arrives at an organization as a scanned copy, or a digital document in any other format, then it’s treated like the master record it is and the source record can be put aside. If the source record was active before it was scanned, then the source document can only be destroyed in accordance with the specific rules set out by VERS.
What Can the Financial Industry Learn from VERS?
VERS doesn’t apply equally to every industry, and it’s not necessarily a perfect fit for those in the financial sector. However, there are essential lessons to be learned by studying it. The most important take away is simple: establish specific, detailed rules to regulate your digital archives. Offer employee training to ensure that all employees understand them and make it clear that not following the standards you’ve set will require in termination. Yes, a document retention policy should be that serious.