Despite their perceived differences, compliance, visibility and oversight are all directly related. No business can run effectively without them, and financial services firms should ensure that these three essential components have a central place in the company’s operations. To that end, what can business leaders do to improve these three areas of importance?
1. Retain knowledgeable staff
As in most industries, employees are a financial services firm’s greatest asset. A good staff can overcome just about any obstacle, and the only way to go about acquiring such a team is to retain the best. Ensuring that workers stick around can certainly be difficult, especially considering today’s job hopping culture. However, experienced employees are needed to achieve optimal compliance, visibility and oversight.
“A company’s greatest resource is its employees.”
After all, compliance regulations aren’t exactly easy to understand, and navigating them properly takes training and know-how. This is especially true of testing procedures designed to analyze a company’s ability to stay compliant. In fact, a study from PricewaterhouseCoopers found that 52 percent of survey respondents had difficulty testing their compliance capabilities due to employee retention problems. This knowledge gap is a driver for more automated solutions that leverage rules and stopgaps to create guardrails for compliance users.
Companies looking to stay compliant and maintain reliable visibility must give knowledgeable employees reasons to remain loyal to the firm. Bonuses and other financial compensation options are certainly a good idea, but it’s also important to give valuable employees room to grow within the organization. The best workers generally aren’t content with dead-end careers, and you’ll need to ensure that your best people have opportunities to move up.
2. Move away from paper when possible
Nothing slows down a company’s daily operations quite like paper. It’s also difficult to track. Whether paper is moving through the mail or simply between offices within an organization, it’s often impossible to know where a particular document is at a given point in time. What’s more, paper records often rely solely upon the author for correctness. Human error will always be a possible factor, even with the most meticulous employee, which means that many documents are returned because they’re not in good order, or NIGO.
Of course, paper just makes sense in certain scenarios, and financial services companies certainly won’t be able to move away from paper entirely in the near future. Still, making an effort to transition to more digital options can drive both compliance success rates and enhanced overall oversight. Since manual processes are a reality, this author believes that “socio-technological systems” will rule the day. Systems that tie humans and technology together to produce the desired results.
3. Invest in a compliant straight-through processing solution
When you move away from paper, what about document transmission and retention? Many organizations have used cloud-based services to fill this space, with excellent results. The cloud can be accessed anywhere at anytime, and it doesn’t force the company itself to create the IT infrastructure needed to store and move documents. In fact, a 2016 report from Robert Half and the Financial Executives Research Foundation found that 62 percent of financial companies currently use the cloud or plan to soon.
Companies looking to improve visibility, compliance and oversight should consider a cloud-based straight-through processing system, such as the ePACS solution offered by Docupace. This product minimizes NIGO rates with a variety of built-in tools, such as cascading data from one sheet to the next. By dramatically minimizing the possibility of human error, organizations can increase their compliance while decreasing the need for human oversight.
What’s more, digital documents and data is infinitely easier to share and access than paper documents. In paper documents, the data is latent and static. Company leaders and other employees can more easily check on the progress of a particular form. However, completely moving away from paper isn’t always easy or even possible, which is why Docupace enables you to print out forms with individual barcodes on each page to facilitate tracking. Once the form is back in the system, digital processing takes over. It is this seamless combination of human interaction and technology that will drive the industry out of the paper jungle and towards pure digital processing.
Tom Embrogno is a principal of Docupace Technologies and brought to market the first cloud-based SEC/FINRA compliant supervisory and storage system that satisfies SEC rules 17a3 and 17a4. In each of these roles, Tom developed a strong background in information technology, cyber security and investment banking, allowing him to see first-hand the inefficiencies that are a typical part of the traditional financial services business.
This year’s Financial Services Institute (FSI) OneVoice conference turned out to be one of the most productive forums for engaging with decision-makers.
At first, attendance at the summit, held from January 23-25 at the San Francisco Marriott Marquis, may have appeared a bit lower than in previous years due to industry consolidation. However, the audiences at the keynote addresses and panel discussions—and the attendees who stopped by the Docupace booth—were mostly senior leaders and executives, and this rich concentration of higher-ups made the conference the ideal place to meet the right people.
Right from the get-go, the DOL Fiduciary Rule was one of the major topics that dominated the conversation. The Fiduciary Rule may be delayed, but broker-dealers and advisors are still attempting to get themselves “DOL-ready.” The company CEOs who spoke at the conference agreed that, regardless of when the Fiduciary Rule is implemented or what it ultimately looks like, broker-dealers and advisors should arm themselves with holistic, end-to-end solutions to strengthen their businesses and create more transparency for investors.
In other conference news, Docupace Global Strategic Advisor Tom Embrogno had the privilege of participating in the cybersecurity panel discussion alongside Karrie Foley, Vice President of Member Relations and Education at FINRA. The decision-makers in attendance were able to ask Tom and Karrie questions about various cybersecurity matters, and we were proud to be able to showcase how we work closely with FINRA to help firms strengthen their cybersecurity.
Like Tom, I was also fortunate to be able to provide recommendations, and gauge the concerns of influential members of the industry, by participating in a panel discussion. My discussion focused on e-signature, and it was fascinating to hear observations and comments from the audience about the challenges that certain firms were experiencing regarding e-signature adoption.
One challenge expressed by members of the audience involved lower adoption rates of e-signature solutions by their advisors. Some attendees related that they saw e-signature adoption rates of around 15% to 20% when they implemented the software as part of an array of separate solutions. Of course, I recommended that instead of a disconnected solution, they should instead implement an integrated solution with uniform workflow at its core, which would enable them to accommodate e-signature and wet signature processes for their advisors in an efficient manner.
All in all, the 2017 FSI OneVoice conference made me very optimistic about the industry’s progress toward creating a more secure, seamless wealth management experience for advisors and investors—and the role we can continue to play in this ongoing evolution.
Michael Pinsker is the CEO and founder of Docupace Technologies, LLC. Since 2005, Michael has led Docupace with the focus on the Financial Services Industry. He co-invented the ePACS, a patent pending SAAS offering for Financial Services that has become the leading SEC and FINRA compliant straight through processing platform for the industry. Michael has enhanced his skills in the cyber security space through obtaining certifications from the American Board of Certification in Homeland Security (ABCHS). He is also Sensitive Security Information Certified – (SII/DHS), Certified Information Assurance certified – (CIA/DHS), and holds the Cyber Warfare certification – (CW TTPs/DHS).