Welcome to the last installment of this 5-part Compliance in Finance Series, where Innovation in Compliance host, Tom Fox, talks with Philip Fry, the VP of Go To Market Strategy for Verint. Today, Phil and Tom are talking about oversight – bringing together data and analysis from across an organization.
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Phil makes the point that the success of a compliance program is dependant on your ability to see the whole picture, so gathering, combining, analysing and understanding the data created by various operational systems can keep an operation running smoothly, or run it off the rails. There are plenty of challenges in managing this month information, but Phil thinks it’s more achievable than it might look at the outset. The key is the ability to cut through all the noise created by the mountains of data, and home-in on areas of concern, of potential or real non-compliance, that require attention.
Tom and Phil discuss the different ways this oversight can be gained, and the importance of open standards across compliance solutions. They talk about Trade Reconstruction, speech analytics, surveillance, and the new technology that is bringing them together and making them accessible to compliance program managers around the world.
If you missed any episodes of the Compliance in Finance Series, click on the links below to catch what you missed, and if your organization needs a comprehensive, up to date and sustainable compliance solution, reach out to Verint to see what they have to offer.
Episode 1: Overview
Episode 2: Capture
Episode 3: Control
Episode 4: Sustainability
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Welcome back to the Compliance In Podcast Series with Philip Fry from Verint! Yesterday we talked about the tools, strategies and importance of controlling the information its now possible to capture, and today, we’re getting into making that kind of activity sustainable over the long term.
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Tom starts the conversation by mentioning how common and multi-purposed the word sustainability is, so Phil gets into some detail about exactly what sustainability means from a compliance in finance standpoint. Namely, that it refers to effectively managing constant change and moving your compliance organisation and resources, technology, practices, procedures, data, skills etc. to a place where they run effectively and efficiently, without undue drama (however that might be caused) and where compliance risks are minimised.
A big part of successfully making a complex compliance program sustainable is looking back on what different tools, systems and strategies have been in place before the newest one, to help plan an attainable rout from where companies are to where they want to be. Phil talks about how this has shaped his vision of the future and the other factors that have to be considered, like the ability to cope with disruption, verifying the operation of a structure, and the attitude and will of an organization. All stakeholders need to be invested in a compliance program if it’s going to be sustainable going into the future.
In tomorrow’s fifth and final installment, Tom and Phil discuss how to get and keep oversight of the mountains of information that are generated by modern compliance programs.
If you missed any of the previous episodes – click the links below to catch up!
Episode 1: Overview
Episode 2: Capture
Episode 3: Control
Resources:
Philip Fry
Verint
In this special four-part podcast series, Richard Lummis and myself consider business leadership from a different angle, that of great economic disaster. This podcast series was inspired by the Great Courses series of lectures entitled, Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp. In this podcast series, we will consider the Dutch Tulip Bubble from the 1630s, the South Sea Bubble of 1720, the Mississippi Bubble of 1720 and the 1907 Panic. Today we begin with the Dutch Tulip Bubble.
Tulips had been imported into what became the United Provinces of Holland in the late 1500s from Turkey. They became quite fashionable with the smart set at the time (i.e. royalty and the aristocracy) and by the early 1630s prices in Holland were already quite high. Then two things happened to create the bubble of 1634-1637. First the small group of tightly knit Dutch traders who bought and sold tulips were overrun by speculators.
Tulips had been imported into what became the United Provinces of Holland in the late 1500s from Turkey. They became quite fashionable with the smart set at the time (i.e. royalty and the aristocracy) and by the early 1630s prices in Holland were already quite high. Then two things happened to create the bubble of 1634-1637. First the small group of tightly knit Dutch traders who bought and sold tulips were overrun by speculators.
Second and perhaps more significantly, a type of formal futures market was created where contracts to buy bulbs at the end of the season were bought and sold, beginning in mid-1636. But this market was sanctioned or regulated as their trades were not made on formal Dutch exchanges. Different groups of traders began to meet together in taverns where they did not have to put much money down and the contracts were not legally enforceable. This significantly lessened any downside in not getting carried away in bidding.
Traders were required only to pay a 2.5% “wine money” fee, up to a maximum of three guilders per trade. Neither party paid an initial margin, nor a mark-to-market margin, and all contracts were with the individual counterparties rather than with the Exchange. The entire business was accomplished on the margins of Dutch economic life, not in the Exchange itself.
In this episode of Across the Board, I visit with Mike Volkov, founder and CEO of the Volkov Law Group. We take a deep dive into the Business Roundtable’s Statement on the Purpose of a Corporation and consider the Board’s role in moving towards the goals articulated in the Statement.
In August, the Business Roundtable announced the release of the Statement on the Purpose of a Corporation (The Statement). The new Statement was signed by 181 Chief Executive Officers (CEOs) who committed to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders. In full, it stated:
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
Resources
Mike Volkov’s 3-Part Blog post series on the Statement of the Purpose of a Corporation. Part 1, Part 2, Part 3
Tom Fox’s blog post on the Business Roundtable’s Statement on the Purpose of a Corporation, click here.
What does control mean when we’re talking about compliance in finance? And how do you maintain it? That’s what Tom Fox and Philip Fry are talking about in this third installment of the 5-part Compliance and Podcast series on Innovation in Compliance. In this context, control means the tools and strategies we employ to prevent non-compliant actions from taking place or being alerted to them when they do.
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Phil mentions that if at all possible it’s better to prevent non-compliance than find it after the fact – but that isn’t always a reality. He shares some examples of the different tools and strategies available to help manage the difficulties of controlling information capture, like taking a cohesive approach to validating the collection and quality of interaction data. What can be very time and resource-intensive when done manually, can be done quickly and accurately via automation.
Tom asks Phil to apply this kind of automation capability to organizations that have a variety of different communications systems in play, and Phil talks about the importance of having open standards and taking an open approach to developing solutions that help various systems co-exist.
Another way to build better control is by staying on top of changes within the workforce, and making sure that your roster of what needs to be monitored when is kept up to date. By being flexible, but strategically using the tools available, you can have greater control overall.
In tomorrow’s episode of this 5-part series, Phil and Tom will be getting into the important issue of sustainability – and what it means in the context of compliance in finance.
Resources
Philip Fry
Verint
Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Today we have a special live and in person podcast recording from Converge19. In this episode, Matt Kelly and I go into the weeds to explore the recent SEC enforcement action against Quad/Graphics and its Peruvian subsidiary. Matt comes in smoking on the egregious conduct of the company and the lack of criminal sanctions against the company.
Some of the highlights include:
- How did the company garner credit for prompt disclosure when it knew about the conduct for 3 years?
- Why have there been no criminal indictments against individuals?
- How many sham vendors, invoices and payments does a company need to take notice?
- Where was compliance?
- Why is it the sham-ness of it all?
For additional reading see the following:
Matt’s blog post, Graphics Firm Draws $10 FCPA Settlement, on Radical Compliance.
Tom’s blog post, Quad/Graphics-the Sham-ness of it all, on the FCPA Compliance Report.
In this new show on the Compliance Podcast Network, Alyson Van Hooser is taking her breadth of experience – personal and professional – to explore and develop leaders across all industries.
The people who step up and take their place are the ones who will make the biggest change in the world. Alyson had to figure out a lot on her own as she was growing up, and that has inspired a passion for taking ownership of her own life and helping others do the same. When you take control of your own circumstances, you can change your reality to match your dreams.
Leadership comes from influence – and influence can go in all directions. Ultimately, the choice is whether or not you want to be a leader who makes incredible things happen. Alyson believes that the influence critical to leadership comes from serving people. Stories about the greatest leaders people have ever had have always been about those who wanted to serve others. Those stories and the lessons we learn from them are the focus of this podcast.
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Identify High-Caliber Future Leaders
I am kicking off STAKE: THE LEADERSHIP PODCAST by helping leaders do the most important part of their job–create the next generation of leaders.
How do you correctly identify high caliber future leaders?
How do you correctly identify high caliber future leaders?
How do you make sure you are not wasting resources on employees who will not step up to the plate?
How do you find the employees who will take your business to the next level?
In this episode, I am not talking about the obvious things you should be looking for such as high performance or relevant experience. Instead, I am talking about 4 very specific signs that come from those employees already showing the highest potential of becoming a successful future leader. Maybe you have been missing these signs all along? It is possible. However, once you have correctly identified your emerging leaders, the pressure is on for you to develop them!
Want me to train your emerging leaders for what it takes to successfully lead the 21st multi-generation workforce? Let’s talk! Email me: alyson@vanhooser.com
If you are looking for tangible action steps and refreshing insights to help ignite the power of your own leadership journey then get my weekly newsletter here.
If this leadership podcast episode was valuable to you, please take a screenshot and tag me @AlysonVanHooser on your favorite social media [Instagram, LinkedIn, Facebook, Twitter].
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Listen Now:
Give Your Ear, Get Their Loyalty
How do leaders increase employee retention?
How do leaders know what employees want?
Leaders have the power to influence their people in a way that will transform their business. But unless leaders learn the skill of listening at a high level, they will miss out on key information that will save them time, money, and a lot of headaches.
In this episode, I am talking about the importance of listening and sharing quick actions you can take TODAY to become a better listener–which will make you a better leader. When leaders focus on improving their listening skills then they can directly increase employee retention rates.
Want me to teach your leadership team how to listen in a way that transforms your business? Let’s talk! Email me: alyson@vanhooser.com
If you are looking for tangible action steps and refreshing insights to help ignite the power of your own leadership journey then get my weekly newsletter here.
If you are looking for tangible action steps and refreshing insights to help ignite the power of your own leadership journey then get my weekly newsletter here.
If this leadership podcast episode was valuable to you, please take a screenshot and tag me @AlysonVanHooser on your favorite social media [Instagram, LinkedIn, Facebook, Twitter]. I’ll share your comments and big takeaways on my feed!
Also, please make sure to review the podcast on iTunes (or Google Play, Stitcher, Android, TuneIn, Spotify). Thank you so much!
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In this second installment of our 5-part series all about Compliance in Finance, Tom Fox is going to be talking with Philip Fry of Verint about the importance of capturing the information necessary to manage risk and compliance in a fast changing world.
Listen to the episode:
The current breed of regulations governing financial services and trading are much more comprehensive and stringent than their predecessors. In their drive to control how businesses and individuals behave, they typically require that extremely detailed information is captured and stored about every transaction. In fact, in the case of MiFID II, it is necessary to capture data about interaction that was intended to lead to a transaction – even if the final transaction did not take place. What these regulations have done is catch-up with the plethora of communication channels now available to bankers, traders, and customers when they communicate with one another.
Although things move on regularly, with new capabilities and channels becoming available, so both compliance officers and their suppliers need to be agile to keep pace, it is possible to capture all of the many available channels in a useful, and compliant way. Phil and Tom talk about how this works, and what some of the potential challenges are with enforcing it. Using proactive compliance, as you learned about in yesterday’s installment of the series, addresses many of the weaknesses and pitfalls that can be found.
Tom wonders if there are other tools and systems in play, apart from UC that need to remain a part of integrated compliance programs, and Phil explains that there is always going to be a period of overlap with legacy systems, and that nothing really exists in isolation. Embracing this diversity is the only practical, strategic and economic way of implementing a new system.
Make sure to join Phil and Tom for tomorrow’s episode of the Compliance in Podcast series, where they’ll be talking about what it means, and what is required to control this massive flow of information, and if you missed yesterday’s Overview episode, click here to listen now!.
Resources:
Philip Fry
Verint
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.”
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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
