SMBs Need E-Mail Compliance, Too

For the past several years, organizations such as the SEC and NASD (National Association of Securities Dealers) have had strict regulations in place requiring financial services companies that sell securities to the public to archive all business communications on nonrewritable media. "As a result, it's common for large firms such as Merrill Lynch or Morgan Stanley to spend hundreds of thousands of dollars for an e-mail compliance management system," says Rick Mancinelli, president of VAR Boca Information Sciences Group, Inc. (BISG). After paying close attention to enterprise compliance requirements for the past few years, the 15-employee company is targeting a market that is just beginning to receive SEC's and NASD's attention — the SMB market.

SMB finance and brokerage firms (typically those with 50 to 250 employees) face the same compliance requirements as their enterprise counterparts. The challenge, however, is they don't have the budgets to implement $100,000-plus e-mail archiving solutions. That's where BISG comes in.

VAR Helps Solve Wholesale Broker's Dilemma
BISG has discovered most brokerage firms want to be in compliance, but getting there can be a daunting task. That was the situation one of this VAR's customers was in. "We had a longtime relationship with a 35-employee wholesale broker when we discovered it was looking for an e-mail archiving solution," says Mancinelli. BISG consulted with the broker and helped it understand its two basic choices regarding e-mail compliance: outsourcing e-mail archiving to a third party service provider or implementing an e-mail compliance management solution in-house. "We helped the customer realize that an in-house solution would provide the most supervisory control and security," says Mancinelli. "Plus, we proposed a solution that was tens of thousands of dollars less than any of our competitors' solutions. The cost of the entire solution, including hardware, software, and installation, was just $32,000."

BISG's proposal included 350 licenses of Redmap Networks' CaptureMail software and an HP ProLiant ML370 server running a Windows Server 2003 OS. The customer already owned HP ProLiant-powered SQL 2000 and Exchange 2003 servers. The installation took three business days and entailed installing the e-mail archiving software on the archiving server, setting up a journaling mailbox on the Exchange server, creating a database on the SQL server, and training the compliance manager on the supervisory procedures.

The solution works by first filtering all the inbound e-mail messages using the customer's pre-existing e-mail filtering software and then forwards the e-mails to the Exchange server. "This keeps content such as spam, jokes, videos, chain letters, and other noncompliance-related e-mail messages off the archival server," says Mancinelli. After the messages reach the Exchange server, the journaling feature automatically forwards a copy to CaptureMail. This ensures interoffice e-mail messages are captured, also. Once received, CaptureMail's AI (artificial intelligence) engine indexes and summarizes the e-mail message and any attachments and stores the summary in a SQL database. Finally, the e-mail messages are archived in their original formats with an unaltered message header. "On a daily basis, the system burns all the e-mail messages to DVD-R, which is a nonrewritable media," says Mancinelli. "Larger firms may use magneto optical or ultra density optical media, but for this project, DVD-R was a perfect fit."

One of the challenges BISG's brokerage customer faced was that even though it had only 35 employees, it was responsible for the communications of an additional 300-plus nonemployee representatives who worked out of other offices and used other e-mail servers. BISG's customer did not want to assume the responsibility of hosting e-mail for the representatives, but it needed to manage its representatives' e-mail messages to be in compliance. BISG solved the problem by partnering with hosted e-mail archiving vendor USA.net and using USA.net's ArchiveAssist service to forward the representatives' e-mail messages to the customer's CaptureMail system. The monthly cost of the e-mail hosting solution was then integrated into the annual fees the representatives paid to the broker-dealer.

BISG reports the customer is very satisfied with its e-mail management solution, and the VAR is currently working on helping the customer replace its legacy document imaging and management solution with Redmap Networks' ManagePoint solution. Since CaptureMail is an extension of ManagePoint solution, the customer will be able to use the same interface and tools to manage its image and document archives.