4 Top Topics to Discuss at the IAA Compliance Conference

Nicola Cowburn
Nicola Cowburn
February 9, 2017


by Nicola Cowburn, CMO

I’m excited, I just booked my ticket to the IAA’s compliance mega-conference in Washington D.C., March 2nd-3rd! There are four key topics I’m looking forward to discussing with delegates, more on that later…

There has never been a more interesting, yet challenging time, for both regulators and compliance teams.

Digital transformation has added to the financial services compliance challenge, by dramatically increasing the volume and complexity of record keeping required for compliance. And the passing of the baton on Capitol Hill has catapulted many of the regulators into a state of uncertainty and re-evaluation.

The IAA has delivered insight and guidance in recent weeks, to help navigate this sea of change. The DOL fiduciary rule features heavily on the IAA conference agenda, alongside cybersecurity, AML and managing compliant marketing, advertising and social media programs.

Clearly, the intent is to help us all to understand how we can marry the digital expectations of clients, and the marketing and servicing needs of the business, beside the uncompromising mandates of compliance.

My special interest is in “RegTech” – the blended buzzword, which refers to the new breed of agile regulatory technology that helps firms better understand and manage risks, while also streamlining the regulatory compliance process, which reduces cost and time spent on regulatory operations.

In the case of my firm, Qumram, we record 100% of digital interactions, in a secure and compliant form. These recordings can be replayed at a moment’s notice in movie-like form, by a compliance officer or regulator, without any involvement from IT. They display exactly what the customer saw, every mouse movement, box check and tab click, across all online, social and mobile channels. They provide indisputable evidence that is retained in compressed form, for as long as the regulator mandates.

So, here are the top four conversations I’m looking forward to at the Investment Adviser Compliance Conference:

#1 Agility

There are more than 200 regulatory changes and updates daily. If printed and stacked today, financial regulations would reach the dizzy heights of the Chrysler building. Experts predict this volume will triple by 2020. We don’t know if the DOL fiduciary rule will be rescinded or revised in the wake of recent political events; we don’t know what the next big regulation will be, or when it will happen; we don’t know how or when shifts in buyer behavior will occur.

Agility in compliance is now mission-critical, if we are to keep pace with regulatory change. This can be achieved by automating manual compliance processes; you will gain the flexibility to adapt to whatever the future holds, rather than continuing to operate reactively.

#2 Employee Governance

The IAA cites “failure to follow stated policies and procedures (e.g., not adhering to practices relating to marketing, expenses or employee behavior)” as one of the top compliance rules referenced in deficiency letters. A difficult topic to monitor in the digital age.

You must record the exact version of a marketing message (or compliance manual, even) that every customer saw, on your website, app or via social media – especially important for content that is posted and subsequently changed. Which version was their investment decision based on? It is also critical to monitor the behavior of your employees on digital channels – not only to ensure that policies are adhered to, but also to identify internal fraudsters.

#3 Digital omni-channel (web, social, mobile)

The notion of omni-channel, and especially social media, is scary for a Compliance Chief, right? Customers have been gravitating towards digital engagement as a preference for several years, and billions of them are now using social media in their daily lives. If they are not already asking to interact with your firm via social media, it is only a matter of time. Veto it, and your firm will lose many clients, along with “illions” in revenue. But the prospect of this doesn’t have to be scary; there are proven solutions, available today.

#4 Digital record keeping

Digital record keeping is a critical compliance linchpin. Without the ability to prove exactly what your customer saw and did on your website, at any moment in time, you are unable to prove compliance with any regulation, SEC, DOL fiduciary rule, MIFID-II, for example.

Upcoming amendments to outdated and ineffective record keeping rules, supported by the CFTC, will eliminate the need to keep records in native file format, or in a non-rewritable, non-erasable form (WORM). Many financial firms believe that their digital record keeping is already compliant, but this is rarely the case. Especially if the system your IT team utilizes for compliant digital record keeping is based on legacy technology, designed to gather customer experience analytics, your compliance risk is high.

All of these topics are easily tackled using RegTech; I would love to discover what steps you are taking to protect your firm.

Let’s talk at the IAA Investment Adviser Compliance Conference (book now) on March 2nd & 3rd

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Nicola Cowburn CMO Follow on Twitter

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