annual compliance review being conducted by CCO

Why you need to take a proactive approach to finding the right financial regulatory compliance vendor in 2022

Let’s talk scope. Compliance scope. In 2022, the average compliance program oversees cybersecurity, operational resilience and the conundrum that is cryptocurrency. Not to mention annual reviews, preclearance requests and countless other (often manual) tasks.

As a compliance professional, your plate runneth over.

And with no clear end in sight, it should come as no surprise that more and more programs are proactively seeking out a financial regulatory compliance vendor to help take some of the more manual, time-consuming tasks off their to-do list.

Moving From Reactive to Proactive

The seemingly daily release of new rules and regulations from the SEC, FINRA and the FCA has created a maelstrom of increased compliance complexity. The firms that have successfully navigated this stream of regulatory rulemaking? Those that took a proactive approach to compliance automation.

While some may subscribe to the “let’s solve the problem once it arises” school of thought, that kind of reactionary strategy within the compliance landscape can often yield negative outcomes and monetary consequences.

Historically, reactionary compliance has been more than enough, allowing teams to address the pressing matters at hand. However, with risk – cyber and otherwise – at an all-time high, that kind of strategy is no longer enough to ensure compliance.

Simply reacting to your environment and selecting the easiest or most available compliance technology because you needed a solution yesterday can mean you end up with one that doesn’t actually perform, leaving your firm to deal with:

  • Poor functionality or user experience.
  • Lack of cohesion between your needs and the vendors capabilities.
  • Overall dissatisfaction.

By taking a proactive approach to your program, and the technology supporting it, you mitigate potential risk before it becomes an issue, preventing, in some cases, irreparable damages.

The Benefits to Proactively Partnering with a Regtech Vendor

The three components of a successful compliance program? People, technology and environment/culture.

And when one of those three elements isn’t working in conjunction with the rest – whether it’s an outdated technology holding you back or inharmonious leadership – your compliance suffers.

Finding the right technology partner is often easier said than done, requiring – for such a partnership to be successful – a symbiotic alignment of your requirements and the vendor’s capabilities.

In taking the time to proactively assess and integrate a new regulatory compliance software, you avoid the potential mishaps that come when you react to a situation by rushing into a new vendor partnership.  

Benefits include:

  1. You don’t have to choose the first vendor to submit a proposal.
  2. You can readily assess your needs from a new vendor, distinguishing between must-haves and nice-to-haves.
  3. You can compare potential vendor alternatives, analyzing pros and cons for each.
  4. You can weigh cost vs. benefit.
  5. You can align your needs with the different offerings from vendors, defining best fit for your compliance team.

Taking a proactive approach to analyzing and integrating a new financial regulatory compliance software is just the first step to achieving your overarching compliance goals. After all, compliance doesn’t just happen. It requires work, analysis and in the 2022 landscape, an innovative technology partner.