Bank on It

Thanks to regulations like the Gramm-Leach-Bliley Financial Modernization Act of 1999 and the Sarbanes-Oxley Act of 2002, banks and financial services companies must use secure means to dispose of documents containing sensitive personal information. Sales people for document destruction companies don’t have to sell these companies on the need for their secure services as much as they have to convince them that their particular companies are best suited the handle the task.

Bob Johnson, executive director of the National Association for Information Destruction (NAID), Phoenix, says, "NAID’s upcoming, industry-specific brochures are focusing on sectors where destruction of records is more discretionary. As far as the financing and banking sectors are concerned, it is more about whom they choose to do their secure destruction, rather than if they will choose someone. Using a destruction service is virtually a foregone conclusion in that arena." Johnson adds, "Success, therefore, is more about differentiation. That is why NAID materials, both past and future, stress the importance of using a NAID member."

Apart from selling the financial services and banking sector on the importance of NAID certification, some companies are taking additional steps to differentiate themselves, which often comes down to customer service. One of the other critical differences can be whether companies provide off-site or on-site shredding, with different preferences depending on the size of the institution.

Smaller, regional financial services companies appear to prefer mobile shredding services to in-plant services, with a "seeing is believing" attitude being common.

Jim Gitas of DataShred Inc., based in Hayward, Calif., says there is an even spilt between on-site and off-site shredding requests among his customers in the financial sector.

"We are NAID certified, so that carries weight, but the clients in this sector that demand on-site shredding generally have concerns about the safeguards we have in place due to the nature of their materials and the materials’ direct correlation with tangible, financial information," he says.

Steve Kalapos, president of Secure Eco Shred, based in Farmington, Mich., says larger banks are more likely to select a company that offers off-site secure shredding services, while regional and local financial institutions often prefer on-site shredding.

Kalapos says the decision may be based primarily on volume, but also on the bank’s presence in the community. "If you look at it unit per unit, a large bank is doing more [volume] than a community bank," he says, but he adds that the decision makers at the smaller banks are also a part of the local community. "They live in the neighborhood and see you at the grocery store," giving them more community awareness, Kalapos says. "There is less pressure on them to save money everywhere than on the large institutions," he adds.

Jack Gerblick, president of Peachtree Secure Shredding Inc., Atlanta, says that roughly 75 percent of his company’s financial services customers prefer on-site shredding. Gerblick says that a financial institution’s chief security officer can choose to accept, mitigate or transfer his institution’s risk when it comes to securely handling sensitive information. "On-site shredding mitigates risk greater than plant-based shredding," he says.

Chet Hinton, president of On-Site Shred LLC, based in Garner, N.C., says that most of his customers in the banking and financial services sectors prefer mobile shredding because of the peace of mind it offers. He also says that thanks to the high-speed equipment that On-Site Shred uses, his crews are able to get in and out in the same amount of time as a company that would collect material to be shredded off site.

Secure destruction companies that know the "devil is in the details" may also have an advantage when it comes to working with customers in the financial services sector.

Kalapos says his crews keep an eye out for the effects of static electricity, particularly when dealing with check stock. This means giving bins and nylon bags the once over, inside and out, to make sure no sensitive documents have been left behind.

Secure Eco Shred’s trucks, the movements of which are tracked using GPS, also include cameras that record the shredding compartment. Although Kalapos says that not every bank or financial institution requests these recordings, he adds that companies often request them when the shredding of unused check stock is involved.

The company also provides its employees with specific training related to document security in the event of a robbery at the facility they are servicing. Kalapos says the company’s crews have been involved in three lockdowns related to robberies so far, illustrating the importance of such training. Secure Eco Shred reviews procedural steps that involve securing material, communicating with the home office about the delay and having their identification on them at all times.

Generally, financial services companies do not require additional operational security measures. Gitas says, "Only when the materials being shredded are financial instruments, in which case the shredding is directly monitored by a ‘panel’ of company officials that typically request a shredded sample prior to the destruction."

Gerblick says that it’s important to stick to a schedule when servicing financial services companies. He says two of Peachtree’s financial services customers require security personnel to accompany his service crews through their facilities. The company services these clients on a set schedule to ensure that it meets this requirement. "It comes down to customer service, which we excel at," Gerblick says.

Hinton says that 99 percent of On-Site Shred’s customers are on the company’s regular weekly, biweekly or monthly service routes, rather than on-call. He also adds that his crews avoid servicing banks on Fridays because this is a typically a high-traffic day for them.

Apart from scheduling considerations, David Van Mullen, vice president of sales and marketing for On-Site SecurShred, based in South Burlington, Vt., says that set-up time and billing are more involved for financial services customers because they often have multiple locations.

Van Mullen also says that many of the company’s financial services customers ask that On-Site SecurShred carry extra insurance or fidelity bonds.

Kalapos says that Secure Eco Shred has talked about providing additional services apart from document and electronic media destruction, but has decided against it.

"We have decided that we want to focus on one thing. Confidentiality is so important, we want to be the best at it by focusing on it," he says.

"We have talked to customers that may have bundled services about the importance of our services," Kalapos continues. Because Secure Eco Shred has no other revenue stream, it puts all of its focus on maximizing its secure shredding business, he says.

Many other secure shredding service providers find it important to have a single focus. "We don’t do document storage," Hinton says, saying he feels that many of his customers see the company’s concentration on secure destruction as an advantage. "We do one thing and we do one thing well."

When it comes to contracting with financial services customers, a national reach may put a secure destruction company at an advantage, but it is not always necessary.