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Compliance Technology: The Quest for the Ideal Solution

February 27, 2019

This is the fourth 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 herepart two here and part three here.

Today’s digital landscape is not as straightforward as it was just five years ago, even in the compliance space. It seems every day more vendors enter the scene with new apps and systems.

This can be good for the industry as the commoditization of digital products should lead to lower costs. However, having so many choices can also further complicate what is already a complex process. If you’re a compliance officer searching for the right solution for your own firm, there’s no easy answer.

At first glance, it might seem safest to go with one of the “tried and true” software systems that have ruled the market through the years. Unless you’re starting from scratch, the prospect of throwing out the systems already in place to bring in a new platform might mean more disruption than your C-Suite has the appetite for. And when you’ve completed your gap analysis, you may find it’s not necessary.

Don’t skip the gap analysis

Within the industry, we all comply with the same regulatory standards, but not all firms arrive at compliance in the same way. Operational systems and structures among firms vary widely, resulting in each firm facing its own unique set of digital transformation needs. You might find yours are comparatively simple. In that case, looking at point solutions from smaller vendors who are new to the market could offer you the best choices.

In an earlier post, we discussed the fact that there are two types of gaps in a system you must address – gaps in workflows and gaps in technology. Regardless of the amazing superpowers of the digital solution you ultimately choose, it won’t matter if you haven’t located and addressed the gaps in your processes first. Initiating this assessment will help you determine whether you’re looking at a large, integrated, multi-pronged solution, or whether a few smaller cloud-based apps can solve your issues – or both.

Stop looking for one solution

The search for the Holy Grail – the one program that can solve all your problems – is still underway. As a compliance expert who spends all day, every day, evaluating digital compliance-related solutions, I can say authoritatively that no such solution exists, and likely never will.

Remember the previous sentence when you begin to talk with salespeople. I’ve known clients and colleagues who took the word of product reps when they claimed their solution could handle all the firm’s issues – or it would, with just a little fix by the developers, “no big deal”. Agreements were signed, funds were transferred. But when the implementation team arrived, the product couldn’t do what the salesperson promised, and making that ‘little fix’ required a new Statement of Work.

Worry about integration

There are a lot of great products on the market and you may find one that gets you 60 to 70 percent of the way to a complete solution. Chances are, however, you will always need to rely on more than one point solution targeted toward the unique requirements within your organization. That’s when a product’s integration capabilities become critical.

I’ve seen professionals practicing what I call ‘swivel chair compliance’ – the need to swivel back and forth between apps and systems because the programs are unable to talk to each other. Trusting the accuracy of your firm’s compliance status to manual processes is no way to manage risk.

To achieve the ultimate digital goal, a more efficient system that frees your compliance professionals to focus on higher-order work, you need a solid ecosystem of integrated programs that can communicate and share data across platforms. Make sure the products you’re considering have that ability. And do not trust the salesperson’s word for it – make them prove it.

Vet the vendor

Lastly, perform due diligence on the vendors you’re considering. This is a major, highly visible investment in your firm’s future operation. Be sure the vendors you recommend to your board or committee have the financial and technical wherewithal to support you well into the future. Even if a product is being hailed as the next best thing, don’t take the hype at face value. If even one of your vendors goes out of business in the next couple of years, it will cause major problems in your tightly integrated ecosystem.

Technology vendor due diligence is an exhausting process if you do it right; it should be! You may have an internal team capable of performing the assessment or you can call in a consultant with expertise in compliance issues. Either way, be sure it’s done so you can face a more efficient and productive future with confidence.

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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