Considering a Tech Solution for Compliance Workflows? Six Questions to Ask Yourself

A technology platform to manage compliance-related tasks, recordkeeping and calendaring is an alluring prospect for many firms. There are many to choose from, all with their particular strengths and, depending on a firm’s needs, weaknesses. They can also be expensive. Firms that fully adopt and utilize their chosen platform can save money and time in the end, freeing up compliance staff for more substantive work. In contrast, firms that are unsure of their needs or ability to fully utilize a technology platform may make an expensive mistake.

To ensure the best choice and fit and before you even review specific platforms, ask yourself the following questions:

  1. How much compliance data do we manage?

The more data that you manage, the more likely you can benefit significantly from a technology solution. Factors to consider include:

  • Number of employees;
  • Volume of activity in key areas (political contributions, personal trading, gifts and entertainment, outside business activities);
  • Complexity of pre-approval processes; and
  • Extent of filing or other deadline-driven obligations.
  1. What are the pros and cons of our current system?

Historically, compliance disclosures and pre-approvals were managed entirely on paper, organized into folders or binders and tracked on spreadsheets.  Filing deadlines, cyclical reviews and similar tasks were, and largely still are, managed on calendars (e.g., Outlook or Google), spreadsheets or lists. These methods are inexpensive and easy to create and use, but there are pitfalls. For example, it can be difficult to stay current with new or changing obligations and especially so for managers to multiple funds that may have different deadlines for similar tasks (such as state Blue Sky filings).

  1. Can we do better with a technology platform?

The answer is almost always yes. These platforms allow compliance staff to manage nearly all of their work on a single interface.   They typically offer document storage and retrieval for compliance manuals and related items, built-in audit trails, electronic forms and reporting, and integration with other platforms (e.g., email, calendaring and feeds from the most common brokers for personal trading reconciliation).

  1. But, do we need a technology platform?

The question becomes whether you will use any of the bells and whistles, or even most of the core functions. Carefully consider the complexity of the firm’s business or compliance program, such as multi-layered approval processes. For firms with affiliates and/or funds with deadlines or other functions to manage, uniting all of those on a single platform could be extremely useful, saving time and minimizing the risk of missing something. The greater or more complicated your needs, the more weight you might have in favor of a platform on the remaining two questions.

  1. What is our budget?

Cost is always a factor, if not the ultimate deal-breaker. In addition to the cost of the platform itself, consider the costs of implementation and training, for example:

  • Depending on the vendor, a certain amount of initial implementation and training may or may not be included.
  • Determine what is included in the training. Will the vendor train compliance staff who then trains employees on how to use the platform? Will the vendor conduct training for employees as well?
  • To what extent is the platform customizable, if needed, and are there additional costs?
  1. Will everyone at the firm come on board?

Firm management will, of necessity, have the final approval on purchasing a compliance platform. In addition to management, involve other key stakeholders who, if you proceed with implementing a platform, will advocate it within their departments or the firm as a whole. Key stakeholders might include: c-level officers, department/team leaders, human resources, senior portfolio managers and those whose monitored activities are extensive.

If you have any concerns about complete adoption of the platform across your organization, you should carefully weigh this question.