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Compliance Team: Top 3 Challenges in Reporting and Tracking Employee Changes

If your financial services firm is like most, your goal is to be on a trajectory of continued growth, serving existing clients while adding to your client base through referrals and marketing efforts. Of course, in order to meet client needs, your firm needs to be staffed adequately, with employees who are well-trained and committed to helping the firm achieve its goals. Just as in other industries, you are probably also fighting against natural attrition when existing employees retire or choose to move to new opportunities elsewhere.

The process of onboarding and offboarding employees comes with certain challenges for the compliance team. In this blog post, we will explore three of those challenges and introduce ways you can ease transitions in your firm.

Challenge 1: Compliance Training

No matter their roles in your firm, new employees need to understand their compliance obligations under company policies and industry rules and regulations. While some of this is up to individual employees’ managers and supervisors, the compliance department must ensure employees know key deadlines and understand expectations for responding to inquiries, submitting attestations and certifications, and more.

Using an enterprise-wide compliance technology solution alleviates many of the headaches of teaching employees how to use disparate systems, spreadsheets on various shared network drives, and manual processes. Leveraging RegTech helps instill a stronger culture of compliance from a new employee’s first day, while saving time and energy for both the compliance team and the new employee’s manager.

Challenge 2: Provisioning Access Rights for Systems

When your firm uses RegTech, it’s also fast and simple to turn access on or off when an employee joins the company, moves to another role or department, or leaves the organization. It’s critical to ensure employees have access to the system functions they need but that their access is limited to the information they need to know to perform their duties. Today’s RegTech makes that easy.

In many firms, employees are categorized by their division, department, and/or supervisory hierarchies. Everyone with the same categorization typically has the same access rights. Your designated compliance system administrator(s) can provision access rights in just minutes. What’s more, when your RegTech solution “talks” to your firm’s HR systems, the process of turning access rights on or off is even simpler. Gone are the days of manually turning on or shutting off access to various compliance systems and tools, and the risk of forgetting to terminate someone’s access when they’ve left the organization.

Challenge 3: Compliance Requirements

Depending on the nature of your firm’s products and services, new employees will be expected to meet various compliance departments. In RIA firms, for example, certain employees must meet SEC-mandated deadlines for making initial reports of their personal securities holdings and then meet ongoing transaction-reporting requirements. For firms without RegTech, this process can be overwhelming, requiring compliance team members to track down information, review paper statements, and evidence their reviews.

RegTech makes that process fast and simple, creating and maintaining records electronically. This eliminates the need to store reams of paper statements in file cabinets while also creating an audit trail, helping the firm prepare for eventual regulatory inspections or inquiries.

Adding or replacing employees comes with challenges, but the good news is that many of those challenges can be met or alleviated through the use of regulatory compliance technology. This, in turn, frees up managers, supervisors, and compliance staff to focus their efforts on reviewing and addressing compliance activities rather than spending unnecessary time on administrative tasks associated with onboarding and terminating employees.