How can FS firms harness tech to meet the rising tide of regulation? We speak to Compliance Expert Stephen Cooper
From MAR and MiFID II interrogation not to mention transaction reporting: Financial Services are beset by more regulation than ever. Yet disconnected systems and outdated technologies can result in “apologetic” information just waiting to be exposed by the auditor, regulator and the media. Former compliance director for Arden Partners and ECU Group Board member, Stephen Cooper, reports on the challenge – and opportunities.
The challenge of execution
In my 30 years in financial services, I’ve watched first-hand how the ceaseless desire for information impacts the business.
For many, the image of frazzled, spreadsheet-ridden employees fixing structural information shortfalls because of rigid, outdated systems still persists.
Management usually claims to know the problems and challenges… but does it really? And more pertinently, can it solve them?
Normally the scope for a solution can be written. But then what? Is it really executed? Or is the outcome simply the “best of a bad job” under the circumstances?
Producing “apologetic” information is risky; waiting exposure by an audit team or regulator, a disgruntled client or the media. The challenge is three-fold:
- How do we turn scope to execution?
- How can we provide the systems and controls to ensure demonstrable management information is available?
- How can we do all this efficiently and cost-effectively?
The benefits of workflow for compliance
Workflow is an open “solutions centric” component-based construction process. It is flexible to edit and simple to maintain and will address systems and control issues where demonstrable management information must be available. It’s efficient and cost effective – and I say that as someone who’s been both the budget holder and the end user.
With workflow software (such as LEAP, developed by FLOvate Solutions) Management is in control – not the IT department. The Board can easily scope their fairly niche demands (board structure, reporting etc under MAR for example) so that workflow becomes a solution tool delivering management information that can be better demonstrated and interrogated.
Bridging the gap
Using workflow, one may bridge the crucial gap between scope and execution that marks both external and ill-defined “early obsolete” internal systems that, for so long, have failed – costing business reputation in the process.
A new era
In days gone by, the business had no choice but to “live with” the products provided by external providers that only partially meet the initial scope and cost thousands to update. With the advent of workflow, these days are quickly drawing to a close.
Solutions providers will deliver Workflow components that can drill down into more and more complex applications, making them easier to edit and insert or remove.
Scoping: FCA workflow example
Take for example the new FCA rules on Complaint Handling. At the top level, the process is always going to be something like:
- Start with new rules e.g. these FCA guidelines on Improving Complaints Handling
- Create a flow chart of the new rules as applicable to your firm
- Compare that with existing policy and procedure, gap analysis–rules and existing procedure
- Scope the new rules, create the Policy and workflow procedure
- Create workflow procedure based on the above process…
- Amend the workflow as required, using in-house resources
This process is just one of many Business and regulatory initiatives that would benefit from workflow. See www.hannafordassociates.com for some more examples.
Find out more
- Learn more about LEAP workflow software
- Discover LEAP’s solution for financial services
- Get in touch to book a demo.
About Stephen Cooper
Stephen Cooper started working as a stockbroker for Merrill Lynch in 1985 having spent 5 years in the Army serving in Germany and Northern Ireland. He joined Banque Indosuez in 1990 as a Private Banker and Investec in 2000. In 2001 he started Hannaford Associates Ltd to create solutions for small to the rising tide of regulation that beset financial services. At the same time as running Hannaford Associates he has acted as compliance director for Arden Partners and served on the Board of The ECU group and WH Ireland Ltd. He has a wide ranging and deep knowledge of the challenges facing firms at the top level and the creation of solutions.