This week on the Innovation in Compliance Podcast, Tom Fox and Philip Fry, the VP of Go To Market Strategy at Verint are releasing a conversation every day about the changes in the financial compliance industry. Philip says: “Verint are taking a unique approach to Financial Compliance. We do not accept that legacy solutions and methods are good enough for our client’s needs. As well as providing the most advanced capture and automation capabilities available within this space, we are also partnering with best-of-breed Regtech and Fintech organizations to provide customers with flexibility and options. Our approach is one of true partnership – we will be open, we will be honest, and we will share our customers’ objectives, working together to achieve them.”

Listen now:

What is Reactive, Active and Proactive Compliance?

These refer to the speed of response to compliance issues

Reactive compliance is the slowest – responding to and addressing compliance problems after they have occurred, analyzing the actions and circumstances in order to both correct the specific instance of non-compliance, and also learn lessons to help prevent reoccurrence in the future.

Active compliance might also be thought of as “in the moment” or “near real-time”.

You might call “Proactive Compliance” a “Minority Report” approach – achieved with tools and processes that focus on identifying conditions in which non-compliances are prone to occur and heading them off with automated tools that enforce communication or disclosure policies – preventing some interactions from happening at all, automatically force-feeding disclaimers into conversations or redacting content before it is transmitted and prompting employees with guidance and knowledge content to help them follow established, compliant procedures.

Capture, Control, Sustainability, and Oversight

Capture –  The extent and scope of financial regulation makes it imperative that businesses can record and capture the full range of electronic communication channels used by their employees. We all know how the number of available channels has increased –instant messaging, video calls and desktop sharing for example. And yet the majority of organizations cannot capture much more than traditional voice, dealerboard, and email communications. If any of their traders are using mobile phones or tools like SfB and Cisco UC, those interactions won’t be captured and are therefore automatically in contravention of regulations such as Dodd-Frank and MiFID. So I’ll be explaining how it is possible to capture all of these channels and why this is the minimum standard businesses should be aiming for.

Control – The increased scope of the regulations – that I just referred to – mean that it is becoming increasingly unsustainable to carry out all of the necessary compliance checks using traditional, mainly manual methods. For example – if your business is placing 50 thousand calls per week, then verifying as few as one in ten of the recordings is already be a huge task. If technology or configuration issues mean that you are unknowingly failing to record just 1% of calls, then that is 500 calls a week that are out of compliance. But because of the sampling rate, you only have a 0.1% chance of discovering this! Which means that you may have thousands of non-compliant interactions by the time you discover it! Automation, is a key part of controlling the environment, can remove problems like this, as well as spotting other types of compliance violations and stepping in before they occur. We’ll look at these possibilities in more detail.  We’ll also look at efficient, accurate transcription of trade-related speech recordings (something that’s much harder to achieve than you might think) and how to make all this easily identifiable, retrievable and readily available to support speedy responses to inquiries.

Sustainability – is not referring to the use of green power sources or the environment, but rather focuses on finding a way to sustain a compliant operation in the face of the very many day-to-day challenges that compliance and IT professionals face –

  • Keeping up with fast-moving, multi-jurisdictional regulations and complying with regulatory requests
  • Managing and sustaining acceptable levels of compliance and risk while organizations are going through widespread and wide-ranging change and transformation
  • Staying on top of the issues and opportunities posed by an ever-widening range of communication streams and recording platforms
  • And maintaining system health, inventory, and performance

We’re addressing the growing need to create a modern operational and systems architecture with proper levels of oversight, while also de-risking the complex projects and migrations that may form a part of those moves.

Oversight – here we’ll look at how it all comes together. The interaction data captured from new recording modes, the management of those recordings and how they are archived and how new tools and approaches can help reduce compliance risk and improve the investigation of interactions and trade-related data.

Tune in to tomorrow’s episode to learn about capturing the huge amounts of information needed to manage compliance and risk in a fast-moving world.

Resources:

Philip Fry
Verint