The FINRA Annual Conference brings together practitioners, peers and regulators to discuss the compliance space. Red Oak Compliance has released a whitepaper detailing some of the top pain points those attending the conference had.
The first pain point Red Oak explores is the sense of duct-taped solutions. While the RegTech sector is booming and firms are eagerly seeking solutions that can reduce the burdens on their internal workflows, there are still many solutions that don’t meet the level of quality that is needed.
It stated that “Many people reported being offered “duct-taped solutions,” resources that were poorly put together, or combining tools from multiple acquired companies that the new owners then attempted to push into one clunky and disconnected package.”
The problem with these duct-taped solutions is they create extra work and make processes longer and less effective, it said. Additionally, some of these solutions don’t solve specific issues and do not make the job any easier for compliance teams.
Instead of accepting these types of solutions, Red Oak urges companies to prioritise compliance technology that is built by and specifically for compliance professionals. “It should effortlessly evolve to the changing needs of your firm without downtime. Talk to your potential vendors about their compliance expertise and the processes they use to prioritize system updates and enhancements.”
As for the compliance software providers, Red Oak says they should be able to highlight how they combine industry knowledge with customer feedback. This is something Red Oak does, with its development guided by regulatory requirements and client feedback, it added.
The next pain point to be discussed during FINRA 2022 was the expensive costs and resources required for updating their existing solutions. Some of the key causes of the costs were when vendors charge for updates to existing workflows or to build a new one, and when statement of works (SOWs) are required for every minor change and update.
Firms should look for a vendor that offers a configurable tool that allows them to make their own changes, it said.
This means they can have more effective management and software because it’s all done internally, rather than relying on the vendor. Other benefits include savings on budget, regaining time by not completing SOWs and giving the team the ability to be more agile.
Red Oak Vice President of Implementations Aaron Berger stated that clients dread the need to update an existing process as they don’t want to request new funds or resources from leadership. They also don’t want to have the hassle of getting SOWs through internal departments.
This means they look for workarounds, which can generate greater compliance and regulatory risks.
“With Red Oak, clients can make updates when needed, and those updates are reflected immediately. Because clients don’t experience downtime, the requirement or new SOWs, or additional resources to make adjustments, they can update the software to reflect process changes as soon as they see an issue or concern. Faster, easier updates keep their team aligned and reduce the potential for compliance gaps.”
Other pain points discussed in the whitepaper are the fear of change, complex disclosures and a lack of integration.
To get more insights about the FINRA Annual Conference, download the whitepaper here.
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