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Compliance Software Employee Conflicts of Interest Technology & Architecture

Why Is Compliance Software Important? And How Do I Know If I Need It?

Compliance officers have traditionally spent much of their time manually tracking the data they need to ensure the firm and its employees remain in regulatory compliance. This volume of data relates to many types of employee activity that can engender risk–from personal trading, to gifts and entertainment spending, to political donations, and more. But such manual tracking of employee activity isn’t just labor-intensive, it’s also a way of working that’s far more prone to error.

Why is Compliance Software Important?

Compliance software is important for the same reason any software is important in the age of Big Data. Tracking, managing, and putting all the data coming in from so many sources to proper use is increasingly impossible without the help of dedicated software. And in the financial sector–with the prospect of serious fines, penalties, and sanctions always looming, threatening the wellbeing of not just firms but also individual employees–software keeps compliance teams operating with maximum efficiency and with optimal accuracy, while also making it easy for employees to comply.

How Does Compliance Software Work?

By automating many of the basic decisions compliance officers would otherwise have to make themselves–and automating many of the basic tasks they would have to execute themselves–a compliance software solution relieves much of this manual burden. This automation can take many forms, but one of the most common, and most helpful in the day-to-day world of the compliance officer, is pre-clearance. Pre-clearance capability allows compliance teams to easily set parameters in the software–parameters that correspond to the firm’s unique code of conduct and policies–which software end users then interact with. Say an employee wants to buy a stock, that employee enters the desired stock purchase into the software, and the software generates a firm yes or no answer, typically within seconds. If the situation for whatever reason is more complicated, the request is automatically escalated to the compliance team for further review.

How Do I Know if I Need Compliance Software?

If you’re part of a growing concern, expanding into new lines of business and maybe even new geographies, you’re no doubt experiencing that increased influx of data described above. Because, again, data is an inescapable part of business life now. As this has happened, you may have noticed your compliance team has gotten not just increasingly busy but also increasingly frazzled. Trying to keep up with it all. Struggling to keep data current and easily accessible. Perhaps struggling with audits, and with generating meaningful reports for the team and for upper management. You may have noticed good people are leaving for compliance departments in other firms. Most importantly, you may have noticed difficulty simply identifying questionable activity–with more and more situations surrounding potentially risky employee activity being surfaced after the fact. These are just some of the signs that may be pointing you in the direction of compliance software.

What Features Should Compliance Software Have?

Any compliance platform you put in place now will likely remain in place for years, so it pays to choose wisely. That is, make sure it’s one you can live with. But more than that, make sure it’s one you can grow with. One that can scale up easily as your business scales up. The kind of software that can grow with you as your business needs grow speaks to a thoughtfulness that carries over into other important areas, as well, like user interface. If you want people to use software of any sort, make it intuitive. Make it engaging. Make it straightforward, with modern UX design principles that carry users along from one step to the next–from one important task to the next. And this doesn’t only matter for end users. It also matters for administrators, that is, for your compliance officers and frontline managers. Along these lines, look for single sign-on, which allows users to sign into the platform using existing credentials and a single ID and password. This will provide fast, easy access to all the products and solutions available in your compliance platform.

We already talked about pre-clearance as regards personal account dealing, but the benefits of that kind of automation don’t end there. Take that single example and expand it into the realm of employee requests for things like political donations and gift-and-entertainment spends, and it quickly becomes clear just how much of the traditionally manual burden of compliance can be lifted off the shoulders of compliance officers with a good software solution. Further, when requests are escalated, or when any matter is deemed important enough to warrant further investigation, good compliance software greatly simplifies next steps. Case-management features centralize all the critical data compliance teams need for investigations. And integration with existing systems, like HR, means trade and spending requests can be cross-checked with existing employee data, and patterns or anomalies in behavior more easily discerned. This allows for much wider, and thus more comprehensive, checks on all kinds of potentially risky employee activity.

Additionally, software allows employee requests to be checked against public data sources, such as news feeds, to guard against market abuse. Auditing and reporting is also made easier with a compliance software solution, with comprehensive reporting and management information suites capable of producing a range of useful visualizations. Finally, dashboard technology–the kind that serves up actionable insights frontline managers can quickly and easily put to work–means even more employee oversight can be shifted from the shoulders of overworked compliance teams. Good compliance software can do all this and more for firms operating globally or domestically.

Will Your Compliance Software Be Future-Ready?
When making a decision on what features your compliance software should have, it really comes down to the value it will bring not only to your business but also to your compliance teams and end users. Whether you build or buy, the compliance software solution you put in place should bring an array of benefits designed to to help take your compliance program to the next level–to be ready for whatever unforeseen developments the future of regulatory compliance holds.