A financial services company is creating a data retention policy for its servers that process and store customer credit card transactions and financial statements. A server administrator must define the minimum time this data is kept. Which of the following is the MOST important factor to consider?
The correct answer is Regulatory constraints. Data retention policies are primarily driven by legal and regulatory requirements. For a financial services company, regulations like the Payment Card Industry Data Security Standard (PCI DSS) and the Sarbanes-Oxley Act (SOX) dictate specific minimum retention periods for transaction logs and financial records. Failure to comply can result in severe penalties, making this the most critical factor. For example, PCI DSS requires audit trail history to be retained for at least one year. The cost of data storage is a secondary business consideration, and backup frequency relates to disaster recovery objectives, not long-term legal retention. The server hardware's age is irrelevant to the data's retention requirements, as data must often be preserved long after the original hardware is decommissioned.
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What are some common regulatory standards that affect data retention policies in financial services?
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How does PCI DSS ensure data security for financial transactions?
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Why is the age of server hardware not a critical factor in data retention policies?