Betterment Saves Time and Money Using a Flexible Record Retention Solution on Amazon S3

Betterment uses automation to deliver personalized financial advice at scale with a focus on supporting customers and increasing access to financial solutions. The company was searching for a reliable record retention solution to replace its existing third-party solution while helping it meet regulatory requirements, and it realized that Amazon Web Services (AWS) could offer the building blocks for a cost-effective solution. Using Amazon Simple Storage Service (Amazon S3)—an object storage service that offers industry-leading scalability, data availability, security, and performance and provides management features that help organizations meet compliance requirements—Betterment reduced the cost of compliance and gained flexibility, time savings, and expanded capabilities.

As a technology-first company, Betterment works to apply a technology solution to the traditionally human services of financial advisement and portfolio management. The company, which launched in 2010, serves customers at all stages of life and can optimize multiple financial goals simultaneously. “There’s a certain set of actions and advice at each life stage. We automate all of that,” says Drew Blas, senior director of internal engineering at Betterment. “And our solutions are tailored to an individual person’s needs.”

Betterment has used AWS services since 2014. By running all its computing on AWS, the company can respond very quickly to evolving business needs. “We get to choose the right piece of technology today and know that tomorrow, when our needs change, we can either scale it to meet demand or simply replace it with something else,” says Blas.

As a broker-dealer, Betterment is subject to books and records archiving requirements under US Securities and Exchange Commission Rule 17a-4(f), which governs electronic record retention to protect against companies deleting or altering records. “The regulators want to see that we store things at the time they happen and don’t have the ability to alter them later,” says Blas. “They also want our storage to be resilient enough that we don’t lose it.” One industry solution involves contracting with third-party service providers that store and restrict customer data and provide a web interface and search capability for interacting with the data. Betterment found that it needed a service that was compatible with its cloud architecture and could scale to handle rapidly increasing volume. The company considered alternative providers; however, these options were not cost effective, comparable in price to the full cost of Betterment’s AWS solutions.

AWS offered the building blocks for a solution to support an internally maintained compliant storage environment. The crucial solution component is S3 Object Lock, which customers can use to store objects using a write-once-read-many model and help prevent objects from being deleted or overwritten for a fixed amount of time or indefinitely. Betterment also worked with an external party to meet its obligations under SEC Rule 17a-4(f)(3)(vii), which outlines that the broker-dealer must retain a designated third-party that can access electronically stored records if required for the SEC’s review.

“All the tools were there for us on AWS,” says Blas. “We were able to start the build-out immediately, test the tools, and already know what the capabilities were.” Betterment completed an 8-week build-out and went live in mid-August 2021. For testing, the company used governance mode from S3 Object Lock and then deployed its solution in compliance mode when the solution went into production—at this point, locking data for the appropriate retention period. Betterment was able to satisfy technical compliance requirements using its solution on AWS while meeting the designated third-party requirement by contracting with an external party. In addition to the compliance locks, Betterment has activated encryption and versioning as well as lifecycle policies to move data to the most appropriate Amazon S3 storage class based on expected frequency of access.

For Betterment, storing its email files using Amazon S3 delivers significant savings compared to its previous solution. The company projects first-year savings of over 70 percent, amounting to about $900,000, plus further years’ savings of up to 80 percent. These savings help the company reduce the cost of compliance, which helps the team focus on new ideas and innovate rapidly without cost barriers. Additionally, Amazon S3 offers the scalability to support growth, which is essential for Betterment because it sends tens or hundreds of millions of emails each month.

Using Amazon S3, Betterment no longer needs to dedicate significant staff time to email archiving and no longer requires staff specialization to manage its record retention solution—team members are already versed in AWS. Using AWS also removes the need for Betterment to recertify access to the compliance archive every quarter because it already certifies and audits its AWS users. “It’s a huge savings for us to have one less vendor and one less integration point,” says Blas. “To have this solution work the way everything else works is fantastic.”

Additionally, Betterment’s solution delivers enhanced storage search capabilities. “It’s much more powerful than what we actually need and much more flexible,” says Blas. Betterment is storing all objects as semistructured data and overlaying a solution that can analyze the archives without needing a database, thereby facilitating data lookup. The analysis layer relies on Amazon Athena, an interactive query service that makes it simple to analyze data in Amazon S3 using standard SQL. Using this solution, Betterment’s compliance staff can satisfy regulators’ data requests more efficiently. “We don’t need to solve for requests ahead of time or build capabilities that we’re never going to use,” says Blas.

Betterment expects to enhance customer support by giving its customer service staff access to archived emails. “Previously, the archiving process was set up solely to satisfy our regulatory document obligations, and access to the archives was restricted accordingly,” says Blas. “Now we can do analytics on those emails as well as customer service lookups because it’s an active part of our data storage environment. It’s accessible to staff across the company who have a business need for it.” Using this capability, customer service staff will be able to resend undelivered emails as well as access past communications to inform present inquiries.

Betterment also regularly explores new solutions on AWS and is considering employing Amazon Fraud Detector, a fully managed service that uses machine learning and more than 20 years of experience to help customers identify potentially fraudulent activity. “We’re always watching for ways to scale services to our customers through automation so that we can deliver at a lower cost,” says Blas. “We often look at AWS and find new solutions where the hard work is already done.”