Wow, You Have Lots of Compliance Data!! Now What?

Collecting Data Is Step One Towards the Future of Tech-Driven Compliance

As recently as a decade ago, the concerns that kept compliance officers up at night centered on collecting the information they needed to identify potential risks:  Were they culling data from all the right sources?  Was that data timely enough to be useful, and was it clean enough to understand?

Need transactions data? No worry!

That was then; this is now. Automation and algorithms have largely answered these questions, making the collection of compliance data a relative breeze. Need transactions data? It’s a simple matter of ingesting data from the relevant brokerage platforms. Records on gifts and entertainment? Build a web portal that makes it painless and fast for employees to report activities. Political contributions? There’s an API for that.

Recognize the Baseline

Data availability, timeliness and accessibility now form the baseline of what a tech-driven compliance system should offer. Yet, it has raised other issues: What should a firm do with all that data?  The next wave of innovation in the compliance space must tackle this question. 

To stand apart, compliance platforms should have two general capabilities. First, they should have the analytical sophistication to spot signals in the data that help enterprises address potential issues. 

Then, they should have the flexibility and versatility to share data seamlessly with other enterprise systems, thereby enhancing the value of their suite of technological solutions. 

Data Analysis, Not Just Data Collection

Enterprises have come to expect that their compliance systems can collect a wide range of third-party and self-reported employee data, clean it, normalize it, and make it accessible. Once that data is available, however, enterprises become accountable for all that’s locked within it, and the onus shifts to compliance systems from simply obtaining data to analyzing it.

Advances in computing and data science have made it possible for providers of compliance systems to integrate sophisticated analytical capabilities into their platforms with relatively little upfront investment. 

That’s where more sophisticated compliance systems can stand apart. The ones that offer the advanced capabilities to make sense of data – to interpret it in a way that doesn’t require a heavy lift from the user and provides transparency and clarity for the user – will enable enterprises to mitigate compliance risks.

Making Teammates Better

In team sports, there’s a question that often nags at players whose stellar play garners individual acclaim: Does their performance help their teammates play better and help their teams function better as a unit? In today’s enterprise technology stack, each component should be held to this same standard.

True indeed, the strength of the team is each individual member!

No enterprise uses a single technology platform for all its operational needs. Instead, the challenge is to knit disparate systems – some may be homegrown, others may be produced by a variety of third parties – into a cohesive unit in which the parts work together to benefit the whole enterprise. 

Tech-driven compliance platforms can play a pivotal role in this. Because regulatory requirements touch virtually all the critical functional areas in a financial services enterprise, compliance systems are collecting data in support of the compliance efforts related to each area.

A truly game-changing compliance system can multiply the utility of that data by making it freely available for other systems to leverage. In a real sense, the compliance system can serve as that teammate that makes every other team member better.

A Single Source of Truth

These capabilities ladder up to providing leadership teams transparency and clarity across an integrated set of data, without the silos that can limit efficiency a nd productivity. Worse, they cause enterprises to miss out on opportunities to serve their clients better. It amounts to an enterprise having a single source of truth on which to base all its crucial decisions.

Amy Kadomatsu, CEO, ComplySci

Ultimately, data is simply a means to an end. It’s no longer enough for compliance systems to be able to collect and clean data. Enterprises are looking for more, and the providers that can offer the next level of innovation will provide their clients the most long-term value.

Amy Kadomatsu is CEO of ComplySci, a provider of employee compliance software and solutions for wealth managers, hedge funds, private equity firms and other financial services businesses

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