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Step Away From The Spreadsheets: Optimizing Your Control Room

Five critical insights and takeaways from a recent “Sunday Times” special report on the future of banking, featuring StarCompliance

“Control room teams operate under major pressure. You have to be quick to respond and you can’t be wrong. If you’re a critical part of the deal-approval process within your firm, you have to be confident you’re making the right call—which means having all the information you need at your fingertips.” So offered StarCompliance CEO Jennifer Sun in the run-up to a recent edition of The Sunday Times—the UK’s bestselling broadsheet newspaper and leading broadsheet business newspaper.

Star was a key contributor to a special pullout section called The Future Of Banking: an independent overview conducted annually by the newspaper which looks at where banking currently is and where it’s headed. Star was center stage in a piece entitled “New And Improved Nerve Centres Of High Finance,” which focused on how automated software solutions reduce risk while simultaneously making compliance control rooms—the nerve centers of big, deal-making financial institutions—more efficient and more effective.

Star has just released its own control room product—Compliance Control Room—which allows control rooms teams to monitor for deal-team conflicts more holistically and proactively, in the process simplifying and streamlining communications, increasing internal and external audit readiness, and giving a broader view of MNPI. Following are five takeaways from this Sunday Times special report.

When it comes to compliance, a lot of money is spent on anti-money laundering and know-your-customer software. But often times control room teams are still managing their space with email chains and spreadsheets—manually sorting through volumes of data to ensure deals are conflict free. And a big bank or financial firm can have thousands of deals simultaneously in process, each with hundreds of people involved. Given what’s in motion—lots of regulations—and what’s at stake—lots of revenue—it doesn’t make sense to spend scads of money on AML and KYC automation but not on an area like control room, where risk mitigation is unarguably of equal importance.

On average, there are 676 days in a megadeal sales cycle. And in 2018 alone, there were 49,000 M&A transactions. These numbers speak directly to the kinds of complexity, as well as the kinds of volume, control room teams face. The work they do is complicated and there’s a lot of it. Automation in the control room means far greater efficiency for teams, which means shortening expansive sales cycles while handling the same volume of work overall. Greater efficiency also contributes to a less-tense, less-stressed control room team—one more capable of stepping back from the day-to-day and examining the bigger picture, and one that’s less likely to leave the firm out of sheer exhaustion.

Financial firms may be geographically dispersed around the globe, but regulators—and the rules they put into place—are converging. This should come as no surprise. Regulation is like any other area of expertise, with regulatory professionals keeping their eyes on what their peers are up to. Beyond this, since the 2008 financial crisis regulators have been under increased pressure from their political masters to demonstrate that lessons have been learned. Letting control room teams try to do so with outdated systems or inadequate investment is a serious risk to the future of any financial organization, no matter where in the world they’re operating.

For businesses large and small, email and spreadsheets are two of the great tech innovations of the 20th century. And in terms of helping to manage the control room space, they’ve taken control room teams far, well into the 21st century. But when it comes to a financial firm of anything but the smallest size, this combination has reached its natural limits. Deals are more complex than ever, with more riding on them than ever. Control room teams shouldn’t be fighting 21st century wars with 20th century weapons, as venerable as those weapons may be, and as familiar and comfortable as those weapons may be to use. Automation has come to so much of industry, and so much of compliance; control rooms should be no exception.

With so much potential for conflicts in the deal-making process, with so much to keep track of, a centralized deal-clearing system is more critical than ever. One that pulls in and organizes critical information from all quarters. For maximum effectiveness, such a system needs to be able to plug into client relationship and human resources data. It needs interfaces that are user friendly and intuitive. It needs to ensure tasks don’t get stuck in compliance dead ends, limiting the activities of traders and analysts. It must provide a clear audit trail, and be able to demonstrate efficient and effective decision-making, not only to the board but also, if necessary, to the regulator. Good control room software helps teams connect the dots, no matter where in the firm those dots might be hiding.

Thanks for reading, but these are just the highlights of “New And Improved Nerve Centres Of High Finance.” To be wholly illumed on the future of banking, you can read the article in its entirety here.