iCompli by LegalRM | The bottom line

In today’s fast-moving, data-driven world, accountancy firms must rethink how they manage and protect information. Information governance (IG) is no longer just about compliance—it is a fundamental business necessity that drives efficiency, strengthens client relationships, and lays the groundwork for AI-driven innovation. Firms that prioritise IG will be better positioned to compete, deliver superior client service, and future-proof their operations.

The business case for information governance

The total amount of data created, captured, copied, and consumed globally is increasing rapidly. In 2024, it reached 149 zettabytes, and by 2028, it is expected to exceed 394 zettabytes. This explosion of data presents both challenges and opportunities. Without effective IG, firms’ risk being overwhelmed by unstructured, redundant, and obsolete data, leading to inefficiencies, security vulnerabilities, and rising costs.

On the flip side, firms that implement strong IG practices can streamline operations, enhance data security, and provide faster, more accurate insights to clients. This not only improves service delivery but also strengthens client relationships and fosters long-term loyalty.

Compliance, trust, and competitive advantage

Accountancy firms handle highly sensitive financial and personal data, making compliance with data protection laws essential.

Key regulations include:

UK GDPR & Data Protection Act 2018 – Requires firms to manage and dispose of personal data securely.
The Companies Act 2006 – Mandates that financial records be retained for at least six years.
HMRC requirements – Dictate that tax-related records be kept for five to six years.
Anti-money laundering (AML) regulations – Enforce strict document retention policies for due diligence records.

Non-compliance can lead to hefty fines, reputational damage, and even legal action. However, compliance is about more than avoiding penalties—it is about building trust. Clients want to know their data is being handled responsibly. Firms that demonstrate robust IG practices stand out in a crowded market, giving them a clear competitive edge.

Cybersecurity: Minimising risk, maximising protection

Cybercrime is an increasing threat, and accountancy firms are prime targets due to the high value of financial data. Ransomware attacks, phishing schemes, and data breaches are on the rise, causing serious financial and reputational harm.

Poor IG increases these risks. Retaining excessive or outdated data creates a larger attack surface for cybercriminals. Firms that prioritise IG and data minimisation reduce their exposure, making them less attractive targets and improving their overall security posture.

Driving efficiency and reducing costs through smart data management

Beyond security and compliance, IG directly impacts operational efficiency. Unstructured data slows down systems, complicates audits, and makes it harder to locate essential records.

A structured IG framework can help firms:

Reduce the time spent searching for documents and responding to client enquiries.
Streamline audits and financial reporting.
Lower data storage costs by eliminating redundant, obsolete, and trivial (ROT) data.

Additionally, cloud-based accounting platforms charge premium rates for data storage. Firms that proactively manage their data footprint can significantly cut down on these expenses.

Information governance as the foundation for AI strategy

As AI-driven tools become more prevalent, a solid IG framework is essential for success. AI thrives on high-quality, well-structured data. Without proper governance, firms risk feeding their AI systems incomplete, outdated, or biased data—leading to unreliable insights and poor decision-making.

Firms leveraging AI for automated reporting, fraud detection, and predictive analytics need:

Clean, well-organised data – AI models perform best when trained on accurate and relevant datasets.
Defined data lifecycles – Ensuring AI systems do not rely on obsolete information.
Security controls – Protecting AI-generated insights from cyber threats and unauthorised access.

Firms that integrate IG into their AI strategy will see greater efficiency, improved forecasting capabilities, and enhanced client service—positioning themselves as leaders in the digital era.

Practical steps to strengthen information governance

Many firms struggle with IG due to a lack of structured processes.

Here’s how to get started:

1. Establish clear data retention policies

Define how long different types of data should be kept, balancing regulatory requirements with business needs.

2. Conduct regular data audits

Identify and remove ROT data to keep systems lean and efficient.

3. Automate data management

Implement technology solutions such as iCompli to classify, manage, and securely dispose of outdated data across multiple platforms.

4. Train staff on IG best practices

Employees play a crucial role in maintaining data integrity and security.

5. Continuously update policies

IG isn’t a one-time initiative—it requires regular review and adaptation as regulations and technologies evolve.

Stronger governance, stronger business

Strong IG is not just about mitigating risks—it is a driver of business success.

Firms that embrace IG will:

Operate more efficiently with cleaner, more accessible data.
Build trust with clients by demonstrating strong data security and compliance.
Reduce costs by optimising storage and automating data lifecycle management.
Lay the foundation for a successful AI strategy, ensuring machine learning models are trained on high-quality data.

In an increasingly competitive market, firms that take IG seriously will be the ones that thrive. The time to act is now—because information governance is not just about managing data. It is about shaping the future of your firm.

The bottom line

Why information governance is essential for accountancy firms