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From doing the heavy lifting when it comes to pre-clearing trades, to being able to delegate review authority with the click of a mouse, software can make compliance simpler and easier for as long as the pandemic lasts and beyond
Eleven-plus months into 2020 and the world is facing more questions than ever surrounding the coronavirus pandemic. For financial firms and their attendant compliance departments, one of those questions is, how much longer will their employees be working remotely? It’s a question that needs answering, as more and more firms come to the realization they may need to reassess their compliance processes and procedures going into 2021. Because of the pandemic and the resulting work-from-home scenario, common tasks—like keeping up with personal trade requests or making sure employees don’t fall behind on certs—that were once easily executed when employees were in an office environment are no longer so easily executed, and firms need to solve for that.
Unfortunately, there’s no clear-cut answer to this critical compliance question, but with a COVID-19 surge in motion it’s not a stretch to say that work-from-home will be with the financial industry through the fall, winter, and spring of 2020-2021. And as companies become more and more used to operating in this fashion, it’s also not a stretch to say that remote work will become more the norm after the pandemic is brought under control. Following are five ways software solutions and the automation they bring can help compliance departments stay on top of this evolving situation in both the short and long term.
1. LET SOFTWARE DO THE WORK ON TRADE PRE-CLEARANCE
Whether your firm is large or small, whether the world is in the grip of a pandemic or not, there’s no reason compliance officers need to personally approve or deny straightforward employee requests to execute a trade. Modern compliance software platforms, like the STAR Platform, use rules engines configured to a firm’s own specifications—per their code of conduct and policies—to inform and automate the pre-clearance and approval process. Employees quickly and easily fill out pre-clearance request forms and receive automated approval or denial decisions within seconds. For situations that aren’t clear yes-or-no calls—trade requests that need further review by the employee’s manager or compliance team members—firms can set up custom escalation paths.
2. LEVERAGE ELECTRONIC BROKER FEEDS FOR TRADE RECONCILIATION
Reconciling brokerage statements and the employee trades contained therein against what the firm has on record is another task an automated compliance platform makes short work of. A compliance software company like Star will have dozens if not hundreds of established electronic feeds that stream a comprehensive list of executed trades for fast, easy matching against what firm employees have entered—or not entered, as the case may be—in the firm’s compliance software system. Be aware, it’s not a given a compliance software vendor will have set up such broker feeds. It’s expensive to do, and often times setting them up is not a high priority for the broker-dealer. Ask about this capability before you ink any deal. It’s a client-focused service worth searching out.
3. CREATE CERTIFICATIONS APPLICABLE TO EACH AND EVERY EMPLOYEE
The bigger the firm the more employees there are, and the more roles within the organization. When it comes to completing certifications, and trying to get to that magic 100% mark, the last thing you want is employees laboring through certs with long portions that are meaningless to them. For starters, this will slow down the actual completion process. And when next year rolls around, and it’s again time for employees to press pause on their primary work to complete their certification, they may have even less motivation to do so: remembering from the previous year how long and tedious the process was. Good compliance software will allow firms to create certs by user group, role, location, and other demographics so only relevant questions will be posed to the individual employee.
4. EXECUTE FIRM-WIDE COMMUNICATIONS FROM ONE SYSTEM
Employees are more dispersed than ever, and the situation looks set to stay that way for the foreseeable future. Versus communications being sent from numerous systems and email addresses, a modern compliance platform offers a centralized, secure way to broadcast critical compliance messages to the whole employee population or just to specific segments of it. And per at least one Star client, who’s increasingly relying on the STAR Platform to communicate in the time of COVID-19, messages broadcast via STAR are more likely to be heard and heeded.
"We've always used STAR for general communications from compliance, but now we're also using it for COVID-specific communications surrounding the increased trading and accompanying restrictions per the code of ethics. We sent out a custom alert and then had it posted on the STAR Platform homepage. We're finding people respond to these custom alerts in a way they've never responded to emails from upper management. It's a great use of STAR, particularly in times like this, when you have to push out communications quickly and record that they've been sent."
5. REVIEW-DELEGATION FUNCTIONALITY, JUST IN TIME FOR THE HOLIDAYS
There’s little doubt fewer people will be boarding trains or planes for holiday trips this year. That being said, it’s still likely many employees will be taking time off from work, even if it is just for staycations. But the markets won’t be on any sort of holiday, and employees will be trading, particularly if said markets get choppy like they did in the spring. As such, there needs to be someone at the ready to handle the trade request escalations that are sure to pop up if a key member of the compliance team takes her well-deserved break.
What if you could simply assign a person, in your compliance platform, the authority to review trade escalations for you while you’re gone? This kind of capability can be, and should be, fundamental compliance platform functionality, and the STAR Platform offers it. It’s another example of what a simple concept like centralization—well-thought out and well-executed—can bring to an organization. Change doesn’t have to be revolutionary to make a real difference, in the long or short term. Small changes—tweaks, evolutions, optimizations—to established processes and procedures can bring some welcome certainty to these uncertain times.
