Best Practices for Data Archiving in Fintech

Right now, the hottest tech space in Africa is undoubtedly fintech?—?a vibrant blend of innovation, opportunity, and, of course, data. Lots of it. Every transaction, customer interaction, and market shift generates a digital footprint that holds immense value. But as this data accumulates, it poses challenges: How do you manage it? Ensure compliance? Extract insights while keeping costs in check? The answer lies in mastering the art of data archiving.

Why archiving matters in?fintech

Think of data archiving as a well-organized library for your company’s digital memories. It’s the process of moving older, less frequently used data to separate, often lower-cost storage, while still keeping it accessible when needed.

Why does this matter so much in fintech?

• Compliance: African regulatory bodies (NDPR, CBN, NCC, etc.) demand strict data retention periods, often spanning years. Archiving ensures you meet these obligations without cluttering your active systems.
• Data management: Archiving declutters your primary storage, making active data easier to manage and analyze, boosting overall operational efficiency.
• Cost savings: Archived data typically resides on more affordable storage tiers, reducing your infrastructure costs significantly.
• Security: By isolating older data, you reduce its exposure to potential breaches, adding an extra layer of protection.

In short, a robust archiving strategy is more than just good practice?—?it’s often a legal necessity and a strategic advantage.

Navigating the regulatory maze

For fintech companies operating in Nigeria, understanding and complying with these regulations is not just good practice, it’s essential for survival. Here’s a breakdown of the key players you need to be aware of:

1. Nigeria Data Protection Regulation (NDPR): This legislation is the cornerstone for fintechs operating in Nigeria. It provides comprehensive guidelines for legally processing personal data, including collection, storage, and transfer.
2. Central Bank of Nigeria (CBN): Financial institutions, including fintech companies, must adhere to CBN circulars on data retention, security, and reporting. These circulars often contain specific requirements tailored to the financial sector.
3. Nigerian Communications Commission (NCC): If your fintech operations involve telecommunications data, you’ll need to comply with NCC regulations. These cover areas like SIM registration, data privacy, and cybersecurity for telecommunications service providers.
4. General Data Protection Regulation (GDPR): While not a Nigerian regulation, GDPR has a global reach. If your fintech company processes the personal data of European Union residents, even if you’re based in Africa, you must comply with GDPR’s stringent requirements.
5. Payment Card Industry Data Security Standard (PCI DSS): If your fintech company handles payment card data, PCI DSS compliance is mandatory. This standard outlines security requirements for protecting cardholder data and preventing fraud.

Beyond these key regulations, it’s important to know other relevant players in the fintech ecosystem, such as the National Information Technology Development Agency (NITDA), the Nigeria Data Protection Commission (NDPC), other relevant agencies, and country-specific laws in places like Kenya and South Africa.

Stay informed by actively monitoring regulatory updates, joining communities like ThePaymentLogue to discuss industry trends and challenges, and seeking counsel from your legal team if needed.

Data archiving methodologies

When it comes to how to archive, there are several approaches:

1. Tiered storage:

Like books in a library. Tiered storage creates a similar system, but for your digital assets.

• Hot storage: This is where your most critical, frequently accessed data resides. Think of it as the new releases section of your library, where the books are in high demand. High-performance storage (like SSDs) is used here for fast access.
• Warm storage: Less frequently accessed but still important data moves here. This might be older financial records or customer data you need to retain for compliance.
• Cold storage: This is the archive. It houses data that’s rarely accessed, but you still need to keep it for regulatory or historical purposes. This data is often moved to lower-cost, slower storage options like tape or cloud archives.

Tiered storage offers a flexible and cost-effective way to manage data throughout its lifecycle, ensuring that the most valuable data is easily accessible while minimizing storage costs for less active data.

2. Data lifecycle management (DLM):

DLM takes a broader view of data management. It’s a comprehensive strategy that encompasses the entire lifecycle of data, from creation and active use, to archiving, and eventually, deletion or destruction.

A well-defined DLM policy is like a library’s cataloging system. It establishes clear rules for how data is classified, where it’s stored, how long it’s retained, and when it’s time to say goodbye. This ensures that your data is well-organized, compliant with regulations, and doesn’t become a costly burden.

3. Cloud-based archiving:

Cloud providers offer specialized archiving services that take the hassle out of managing your own infrastructure. They provide scalable, durable, and secure storage solutions designed for long-term data retention. This allows you to offload the burden of managing hardware, software, and backups, freeing up your resources to focus on your core fintech business.

Popular cloud-based archiving options include:

• Amazon S3 Glacier
• Google Archive Storage
• Azure Archive Storage

4. Hybrid approaches:

Many fintech companies are opting for hybrid models that combine on-premises and cloud-based archiving. This gives them the flexibility to keep sensitive or frequently accessed data in-house while leveraging the scalability and cost-efficiency of the cloud for less critical data.

Different approaches suit different needs, and the optimal choice often depends on your specific circumstances.

Tools of the?trade

There’s no shortage of archiving tools available. Here’s a quick rundown of some popular choices:

• Amazon S3 Glacier: Best for rarely-accessed data due to its unbeatable prices and robust durability. It might take a bit longer to get your data back when you need it, but it’s perfect for keeping up with regulations.
• Google Cloud Storage Archive: If you’re already using Google’s cloud services, this one’s a no-brainer. It’s easy to scale up or down, and it’ll feel familiar. It’s a bit pricier, but you’ll get your data back faster than with Glacier.
• Azure Archive Storage: Strict security and geo-redundancy make it a great choice if you need to make sure your data is safe from any disasters. Plus, you can choose the storage option that fits your budget and how quickly you need to access your data.
• IBM Spectrum Protect: This one’s not just for archiving?—?it can also handle backups and recovery. It’s a good all-in-one option, but it might be a bit too complex for some.

Choosing your tools:

Selecting the right archiving tool is a strategic decision. Consider these factors:

• Data volume and growth: How much data do you need to archive now, and how much do you expect it to grow? Choose a solution that can scale with your business.
• Frequency of access: How often do you need to retrieve archived data? If quick access is essential, prioritize solutions with faster retrieval options.
• Budget: Cost is a major factor. Compare pricing models (per GB, per request, etc.) to find a solution that aligns with your budget.
• Integration: How well does the tool integrate with your existing systems? Look for APIs and integrations that streamline data transfer and management.
• Security and compliance: Does the tool meet your security and regulatory requirements? Ensure data encryption, access controls, and compliance certifications are in place.
• By carefully evaluating these factors and exploring potential hybrid approaches, you can select the archiving tools that best suit your fintech company’s unique needs.

Best practices: archiving done the right?way

To get the most out of your archiving strategy, follow these best practices:

1. Regularly update data retention policies: Schedule regular reviews, at least annually, to ensure they align with the latest regulations and your organization’s current requirements. This minimizes compliance risks and prevents unnecessary storage of obsolete data.
2. Prioritize data integrity and security: Archived data is useless if it’s corrupted or compromised. Implement robust encryption for sensitive data, regularly verify checksums to detect corruption, and enforce strict access controls to prevent unauthorized access or tampering.
3. Automate: Manual archiving is tedious and prone to errors. Invest in intelligent automation tools that streamline data identification, classification, movement, and retrieval. This not only saves time and resources but also minimizes the risk of human error, ensuring a consistent and reliable archiving process.
4. Monitor and audit with vigilance: Keep a close eye on your archive. Are retrieval times acceptable? Is storage utilization optimized? Regular audits help you identify and address potential issues before they escalate into major problems. Make the most of monitoring tools and set up alerts to help you stay informed and take swift action.
5. Plan for scalability: Your data volumes will likely grow over time. choose archiving solutions that can seamlessly scale up to accommodate your future needs. Consider cloud-based options that offer virtually unlimited storage capacity and the flexibility to adjust resources on demand.
6. By adopting these best practices, you’ll create a resilient, adaptable, and secure system that keeps your data safe, compliant, and readily available.

Challenges and how to overcome?them

Even with the best intentions, archiving can present challenges:

• Data volume: Fintech generates a LOT of data. Ensure your solutions can handle your current volume and accommodate future growth. Cloud-based solutions offer excellent scalability.
• Regulatory changes: Keeping up with the ever-changing regulations in Africa is a constant challenge. Partner with legal experts and invest in compliance monitoring tools.
• Integration issues: Integrating archiving systems with existing infrastructure can be tricky. Choose tools with robust APIs and consider hiring consultants if needed.
• Data retrieval times: If you need to access archived data quickly, ensure your solution offers fast retrieval options. Tiered storage can help with this by keeping some data on faster tiers.
• Remember, challenges are opportunities in disguise. By proactively addressing these issues, you can strengthen your archiving strategy and turn it into a competitive advantage.

The future of archiving

The world of archiving isn’t standing still. Here’s what’s on the horizon:

• AI-driven archiving: Artificial intelligence can help automate data classification, tagging, and retrieval, making the entire process more efficient.
• Blockchain for data integrity: Blockchain technology can provide an immutable record of archived data, ensuring its authenticity and preventing tampering.
• Advances in cloud storage: Cloud providers continue to innovate, offering cheaper, faster, and more secure archiving options.
• By embracing these emerging technologies, you’ll ensure your archiving strategy remains cutting-edge and future-proof.

Your data’s?legacy

In the dynamic fintech landscape of Africa, data is the lifeblood of your business. A well-executed archiving strategy isn’t just a box to check for compliance?—?it’s a safeguard for your past, a foundation for your present, and a key to unlocking future insights.

So, take the time to evaluate your current practices. Identify areas for improvement, leverage the tools and methodologies available, and stay informed about the latest trends. By doing so, you’ll ensure your valuable data remains accessible, secure, and compliant for years to come.

Build a fintech solution the right way with?Digicore

Looking to build a robust and scalable FinTech solution? Partner with Digicore?—?the experts who get it done right. We build customer-centric solutions that are secure, reliable, and compliant. No cutting corners, no legal headaches. Just FinTech solutions that work for your business.

Ready to build your FinTech dream the smart way? Get in touch today.