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The latest iteration of Compliance Control Room is almost here! Today we sit down with Star control room expert Tim Ward and find out how new functionality will increase team efficiency, further reduce firm risk, and make compliance even simpler
Fall is shaping up to be control room season here at Star. Last week in this space, we gave you the 5 Features The Best Control Room Software Will Have—a primer on what to look for when shopping for a control room software solution. Next week we’ll be offering a sneak preview of our brand new e-book: The Compliance Control Room Handbook—Who Needs One, How To Build One, And Why The Future Is Now. Later on in the month, we’ll be covering our September 15 webinar with control room expert Steve Brown: Deep Dive—The Building Blocks Of An Efficient, Effective Control Room. (Register here now.)
Today we have an interview with Star’s very own control room expert: Director of Product Strategy & Marketing Tim Ward. Tim gave us the inside scoop on some brand new functionality coming soon to Compliance Control Room—Star’s revolutionary organizing, data-centralizing, risk-reducing control room software solution. Here he is on 360-Degree Conflict Searching, and how all of the new functionality will increase team efficiency, further reduce firm risk, and make compliance even simpler.
StarBlog: Tim, how has Compliance Control Room evolved since its launch?
Tim: We’ve had some great feedback from the field since the product was launched, and we’ve been surprised how firms of all sizes and types would like to use the product in the future. The main themes have been deep integration with existing systems and increased efficiency and speed for the control room analysts themselves.
StarBlog: What can you tell us about what the team is currently working on?
Tim: One is the enhanced deal-conflict searching capability: 360-Degree Conflict Searching. The second one is the integration of Star’s employee conflicts monitoring system—the STAR Platform—and Compliance Control Room. This second capability will allow the two systems to talk with one another. The big benefit here is, as soon as a deal comes into being on the deal side of the firm, Compliance Control Room will automatically communicate and coordinate with the STAR Platform regarding the deal. This will make it possible to restrict personal trading of any affected security essentially in real time.
StarBlog: Tell us more about 360-Degree Conflict Searching.
Tim: At the moment, Compliance Control Room is able to do a conflict search with records that are already in the system. Say there’s some new deal activity surrounding a certain company. One of the things Compliance Control Room currently will do is ask: "Are there any other open deals from that company. Is there any inside information? Is it already restricted?" That’s the existing capability.
The next iteration of Compliance Control Room will say: "In addition to running that conflict search, is there any other activity broadly about that company I should be aware of that might influence my conflict clearance decision?" That other activity might include information about deal-team members. That's where the connection to the STAR Platform comes in. Have any of the potential deal team members traded that company? Do any of them already hold it? Have they ever entertained an employee from that company?
Further, do any of them have a part time job with that company? Are any of them involved in any outside business activity with it? So when you search for said company, you’re going to get not only the deal information or other active deals, you might also find out someone on the deal team has 5,000 shares in the target company, a part time job with them, and takes the CEO out to dinner all the time.
And this is the kind of comprehensive conflict search—a 360-degree view—that the evolution of Compliance Control Room will bring to a firm’s compliance department. We are also laying the groundwork for these communicating, coordinating STAR systems to talk to other systems at the firm, like CRMs or procurement systems. And if that procurement system happens to have a sanctions function, and something related to, say, financial fraud pops up, then your deal team will know know about it immediately.
StarBlog: How are control room teams monitoring for conflicts like this today?
Tim: They’re doing it manually, or using software platforms that don’t integrate, so it’s a piecemeal process. They're logging into other systems. It's time consuming and there’s a lot of so-called “chair swiveling.” Compliance Control Room is going to save them time because they won't have to log into other systems to do it. It will literally save hours of time, and who doesn’t want time back in their work day?
StarBlog: Will it reduce risk? One of the beauties of automation in general is it takes some of the chance out of relatively simple tasks—tasks that can get repetitive and boring and lead people to miss important things, thus increasing risk. In this case, the risk is that a critical conflict will be missed and the firm loses a deal, finds itself under regulatory scrutiny, or worse.
Tim: Yes. Automation increases accuracy, which reduces risk. If control room teams are relying on manual processes to surface potential deal-team conflicts, and they’re not being thorough enough, they might just miss something. Compliance Control Room will automatically search lots of different systems, with lots of different search terms, and differing ways of referring to the same company.
What this means is, you can create aliases in the search. The other benefit here is, Compliance Control Room will save all your searches with the search results, which means there’s an audit trail that the search has taken place with a snapshot of the results. This will help you evidence your compliance to regulators. Anytime you have a centralized system and you can say to a regulator: “Let me log in and show you our process. Here's what we've done. Here's the audit trail. Here's how we can be confident we caught all of the conflicts." That's a much easier conversation than: "Hang on a minute. Let me go to the filing cabinet and search through my email.”
StarBlog: How is the searching itself done? Has anything of note with the interface changed? Are current control room users going to be able to get going immediately with the new iteration?
Tim: They absolutely will. The interactive mechanics are exactly the same, so users will be immediately up to speed. The changes are about a broader and deeper search across different sources, all within the same conflict-search application. There will be a section in the software for every additional data source. You might have 15 or 20 of them, and then in one move the new feature is going to allow you to search across all of those from one single, centralized place.
And while right now conflict searches are triggered manually, eventually that will also be automated. That is, Compliance Control Room—tied into all these complementary, coordinated firm systems—will be automatically running conflict searches in the background and sending out alerts as the situation changes. A control room officer could have cleared someone for a deal initially and that person does something—like buy shares in the target company—that changes the situation. This kind of continuous conflict checking will make it far simpler and easier to spot such changes so firms can further reduce risk. And simpler is always better, right?
