How Automation Is Changing the Compliance Workflow

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Read more about author Brad Shrum.

With over 1.1 trillion MB of data generated daily, you would be hard-pressed to find an industry that isn’t leveraging data and technology to drive organizational success. And for good reason – from real-time decision-making to better generating visibility into operations, data has become an indispensable part of the business world’s intelligence toolbox. That said, some sectors are still facing significant growing pains when it comes to leveraging data and technology to build more effective workflows. At the top of this list is the compliance industry – particularly regarding investor regulation and compliance.

The investment compliance vertical has been steeped in tried-and-true practices for decades, largely eschewing innovation in favor of the traditional “ways of doing things.” However, given how rapidly the business world is expanding, legacy compliance programs are struggling to keep up, and professionals in the space are stretched well beyond their capacity. In realization of this, the compliance space has begun to turn to technology and data to help them streamline operations, boost visibility, and become more agile – and more importantly, to ensure solvency, liquidity, and reduce risk.

However, undergoing a widespread technology transformation is easier said than done, and compliance teams are finding it difficult to build the efficient pipelines they need and identify exactly how they want to deploy their data resources. Moreover, with many compliance teams still in the early stages of their technology and data adoption, many are particularly uncertain about how to leverage automation as part of their modernized tech-centric approach.

With that in mind, here are a few key ways in which compliance teams should look to utilize automation and data first and foremost.

Portfolio Monitoring 

As strategies shift and investment opportunities become more globalized, businesses’ investment portfolios are only going to become infinitely more complex. And without automation, compliance teams stand little chance of effectively managing their portfolios. To get portfolio management right, compliance professionals need to have all of the relevant rules and requirements at their fingertips so that they can easily reconcile portfolio data and evaluate it. To successfully manage this, businesses need a system that allows daily reconciliation and enables them to automate portfolio monitoring. This will dramatically reduce the potential for human error and unlock a team’s bandwidth so that they can tackle more pressing tasks and strategic goals.

Compliance Reporting 

As oversight bodies like the Department of Justice (DOJ) and the Securities & Exchange Commission (SEC) strike firmer postures around accountability and enforcement, the regulatory landscape is going to call for businesses and their compliance teams to be as proactive as possible. This means that the days when compliance teams had the luxury of taking weeks or months to aggregate reports are quickly falling by the wayside. Simply put, we are entering an age where if organizations are asked for compliance reports, they need to have them at the ready.

To meet these “on-demand” reporting needs, businesses would be well served weaving in as much automation as possible into their reporting processes. Real-time access into compliance programs not only allows companies to make more rapid decisions but can also save companies a huge amount of money and prevent reputational damage. For example, instead of waiting for planned reports to come out before taking action, compliance teams can dynamically monitor for any potential issues ad hoc. Thus, the teams can pre-emptively investigate and mitigate any issues that arise, giving leadership teams and stakeholders peace of mind that they are always as compliant as possible.

Regulatory Intelligence

Any successful compliance program requires businesses to not just have a finger on the pulse of what is occurring internally, but externally as well. As rapidly as internal needs are shifting in the modern business world, the global regulatory landscape is moving just as fast. For example, the SEC unveiled over 30 proposed rule changes in 2022 alone. Multiply this across regulatory agencies worldwide, and the amount of external information compliance teams need to be tuned into is truly dizzying.

By using automation though, it is possible to alleviate many of these pain points. Through automation, businesses can quickly gain access to the key insights they need, without the downtime associated with manual data analysis. In addition, automation allows for your compliance organization to learn and shift automatically by synthesizing data from around the world and weaving it together with existing datasets. This means that compliance teams can always stay on the cutting edge of compliance versus having to scramble retroactively to ensure standards and protocols are met across their portfolio.

The challenges compliance teams are facing are only going to become more complex in the years to come as the world becomes more interconnected. However, that doesn’t mean that teams are powerless in the face of these growing demands. By strategically wrapping in sophisticated data and automation, it is eminently possible for compliance teams to become better equipped to handle evolving challenges while building the infrastructure needed for medium and long-term success.