Financial regulation becomes broader and more restrictive. At the same time, employees are working from home and trading at higher volumes on more platforms than ever before.
Yet compliance teams have limited budgets and staffing resources, and many struggle to implement effective risk mitigation measures in financial services firms with hundreds or even thousands of employees.
It is increasingly clear that to minimize risk, companies need the help of dedicated compliance software.
But buying and implementing this software across teams and workflows is just the first step in a much larger process. It’s about convincing employees to use compliance software that will really make a difference.
Driving Software Adoption
Why might employees be slow to adopt or hesitant to use compliance software? The answer is quite obvious. For most employees in the financial services industry, compliance may seem like a tedious administrative task that offers them no direct benefit. While compliance teams may understand that overall organizational compliance depends on everyone’s participation, employees may have a harder time seeing how their own compliance roles are integral to the organization’s overall mission.
Additionally, financial services firms often combine multiple in-house or third-party technology solutions to meet compliance requirements. However, these disconnected tools remain spread across different systems. If employees don’t know how or where to perform compliance tasks immediately, there is little incentive to adopt the software.
How can compliance teams drive software adoption in light of these challenges? It comes down to creating a culture of compliance by making compliance tasks easier and emphasizing the importance of each task to the business as a whole.
The following tips can help compliance teams gain employee buy-in, encourage adoption, and reduce risk to their business:
1. Involve frontline managers
The responsibility for driving software adoption and the consequences of a failed software implementation often rests solely with compliance teams. Compliance team members, however, tend to sit in entirely different sections of the organization compared to employees who must use the software in their day-to-day roles.
When frontline managers take on some of this responsibility, it can drive greater adoption and accountability. By ensuring that their direct reports meet compliance expectations, managers can help create a stronger culture of compliance throughout the organization. So keep managers up to date on employee compliance activities so they can focus on those who might need an extra push. Compliance software can facilitate this effort through dashboards, automated alerts or even pre-programmed reports – which together can reduce the need for one-to-one communication from the compliance officer and ensure that the right people have what they need to help support a culture of compliance.
2. Effectively distribute updates and compliance information
If an employee has a compliance-related question and cannot find an easy solution, they may be discouraged or delayed in using compliance software. So give them an easy way to find answers when they’re stuck and no compliance officer is available to offer direct help.
Create a document library or database in (or easily accessible from) your compliance software that employees can search and use. Include material that answers common compliance questions. For example, what is the company’s policy on gifts and entertainment? When should employees submit approval requests for these items? Will these and other policies change if an employee works in another country?
The most common questions vary from company to company, but answering them — and making those answers easy to find — is a good place to start.
3. Automate manual tasks whenever possible
Highlighting how the software can automate manual tasks – and therefore free up capacity for higher value work – will drive its adoption within the compliance team. Manual tasks always create additional headaches. Take brokerage statements, for example: whether the employees themselves or members of the compliance team are responsible for entering them into the system, it takes time. And then there’s the added administrative work of making sure everything is done right and people are held accountable.
Instead, rely on a platform that can automatically ingest trades executed through brokers’ electronic feeds each day or trust a company that provides a broker paper statement processing service. This saves employees and compliance officers time while increasing the compliance team’s chances of detecting, investigating and defusing suspicious activity.
Compliance software offers a promising solution to aligning with regulations, but only if compliance teams can address some of the common causes of organizational pushback. To cultivate buy-in and promote software adoption, teams need to disseminate compliance information well, automate compliance requests whenever possible, and engage front-line managers. These solutions can help manage organizational risk, avoid costly regulatory fines, and prevent reputational damage.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, and the opinions expressed do not necessarily reflect the views of the CFA Institute or the author’s employer.
Image credit: ©Getty Images / Erik Isakson
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