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Choosing Compliance Technology: Options and Considerations

January 29, 2019

This is the third in a series of blog posts by Mitch Avnet of Compliance Risk Concepts on the process of building a business case within your firm to support investment in compliance technology. Read part one here and part two here.

Integrating compliance technology into your organization is never a one-and-done proposition. If you’ve conducted due diligence and identified the gaps in your firm’s workflows and systems – as discussed in last month’s blog – chances are you’ve found more than one and in more than one area. Interaction and interdependency between departments typically means any solution you decide to implement will have an impact on other areas of your organization.

It’s important to know what you’re getting into and recognize you don’t have to (and shouldn’t) implement all the changes at once. And as you begin to consider solutions, it’s important to realize you don’t need to develop them inhouse, using expensive overhead and hours no one has free to invest.

While inhouse development is an option, many firms today are opting to go a different route, with the many cloud-based Service as a Solution (SaaS) products introduced to the market over the past few years. Products are available for compliance management and surveillance in virtually every area – if you’re here reading this blog, you’ve already found one of them.

SaaS solutions offer a number of advantages from an implementation standpoint.

Time is one big advantage. A solution that may take IT staff upwards of a year to complete inhouse can be implemented within 90 days with most SaaS products, usually requiring no new hardware and only minimal participation from IT.

Many are configurable to your specific needs and technologies exist that enable you to overlay them onto systems you already have in place. Many Saas firms provide training, which simplifies and speeds onboarding.

But, in my opinion, the biggest advantage cloud-based SaaS solutions offer is the fact that you are the beneficiary of all updates and changes the platform may make – without the pain, disruption and huge internal effort usually associated with inhouse software updates. Your systems are always operating with the latest, greatest software version available.

Of course, your C Suite executives and IT professionals need to become comfortable with the idea of having the firm’s data stored offsite, in the cloud. As wealthmanagement.com reported recently, this is becoming less and less an issue as firms come to understand the sophisticated security measures being taken by cloud-based providers. SaaS providers in the financial services space offer dedicated connectivity to your own private cloud and data is stored using secure write-once-read-many (WORM) formats to comply with SEC Rule 17a-4. Cloud-based workflow is quickly becoming the norm in corporate operations; according to a survey recently cited in Forbes, the cloud will drive 83% of enterprise workloads by next year.

Because there are so many SaaS options that address specific compliance activities, you may find it worthwhile to implement some of them, even if you decide to go the inhouse development route for the bulk of your project. Either way, SaaS solutions can pave the way for a more successful implementation roadmap.

Once you’ve identified your gaps and the subsequent solutions you need to implement, how you proceed can often determine your ultimate success. A complete “boil the ocean” approach is not how you should approach the project, for a number of reasons.

When you’re trying to make a case for compliance technology, presenting a lengthy, complex roadmap to delivery will likely backfire. Chances are your C Suite executives and IT professionals don’t have the appetite for it, and we’ve all witnessed how large initiatives can be derailed in time as mergers happen, personnel changes or the firm’s priorities shift.

Instead, take an 18- or 36-month perspective. Identify where some of your greatest needs intersect with relatively quick and simple solutions. Focus on where you can achieve some quick wins to prove to your executives and affected employees the value your project is creating for the firm. Move on to the next quick win and keep the momentum building.

With the help of a project roadmap that isn’t intimidating and quickly implemented solutions that offer vast improvements in workflow and capability, you’ll be on your way to success in compliance technology integration.

Mitch Avnet

Mitch Avnet is the CEO and Managing Partner at Compliance Risk Concepts. Mitch is responsible for business development, relationship management and overseeing the execution of all client driven / business focused Compliance related projects and strategic engagements.

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