Reference: Journal of Securities Operations & Custody Volume 14 Number 2
Abstract
While the tsunami of regulation following the 2008 financial crisis has receded, compliance for wealth management companies continues to grow more complex. In recognition of the difficulty of meeting evolving standards and obligations, the US Government now offers incentives to companies that adopt technical solutions. RegTech that surfaces issues in a timely manner and holistically across an institution’s book of business is seen as directly correlated with transparency and accountability. It is also good business. Today’s solutions empower companies to streamline account management, reduce risk, lower cost and strengthen client relationships. The author shares best practices and important questions to consider when designing and implementing a 360-degree compliance programme.
The key to success is synergy among people, processes and technology. Successful compliance starts with stakeholders across the front, middle and back offices. With guidance and best practices gained from interactions with regulators, consultants and technology providers, the company establishes the procedures to ensure the programme properly addresses its investment management business and its regulatory risk. With the right people and procedures in place, thoughtful RegTech serves as the glue that enables proactive, efficient, 360-degree compliance. With the breadth of data and volume of regulations that companies contend with today, a 360-degree compliance technology platform should employ comprehensive and accurate data; exception-driven rules to eliminate false positives; well-designed workflows that distribute tasks logically across the front, middle and back offices; and efficient oversight tools. Technology cannot replace sound, human-driven policies and procedures but when combined with customer relations and portfolio management into a 360-degee programme, RegTech provides vital protection against regulatory, operational and reputational risks and gives investment managers an understanding of their businesses they could never achieve before. This paper discusses the evolution of 360-degree compliance programmes and share best practices for designing and implementing them. It analyses how, when applied across all investable accounts and business segments, technology can transform compliance from a reactive to a proactive process.
Keywords: RegTech, WealthTech, compliance, investment management, FinTech, wealth management, fiduciary monitoring
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