The reputation of an organization today is directly proportional to its ability to protect data integrity and meet the necessary compliance mandates. In such a scenario, the actions, activities or relationships of an employee that undermine the employer’s policies can have a damaging effect on the firm’s brand value. Especially in highly regulated industries such as financial services, it is crucial for firms to avert any conflict of interest arising from the employees’ unapproved and clandestine personal activity. Anyone with insider information, for instance, may exploit it to invest using their personal, spouse or children’s brokerage accounts: a breach of regulatory law and code of ethics established by the firm. Although compliance officers undertake various measures to review employee behavior, the manual processes debilitate their collective efforts to enforce compliance. The result: loss of market reputation and a long-drawn legal battle.
New York-based ComplySci has innovated a state-of-the-art platform that helps companies operating in the financial domain to manage compliance risks holistically. Risk Data EngineTM—a best-in-class SaaS-based preclearance platform—is creatively designed to monitor the workflow and verify employee action. Crafted with Agile for quick monitoring, the workflow engine proactively tackles the conflict of interest by directing employees to seek permission before making any trade and political contribution, or even when transacting a gift. The preclearance requests are then routed to compliance officers or the appropriate individuals within the chain of command to approve or deny permission.
Through the “Certification” feature of the platform, employers can periodically send questionnaires to attest employees if they have accessed critical non-public material, or indulged in other activities that hint at employee policy violation. The data feed management feature allows the compliance team to extract data from hundreds of brokers, public records, and federal databases. Through this data, the team can cross check if the employees’ version of truth matches with the available data.
ComplySci has built a team entrusted to develop proprietary algorithms for data normalization. Levy says, “Our data team ensures data integrity by flagging anomalies.” A firm’s decision makers can generate expeditious reports without having a dedicated IT team to perform the requested task. “Because there is a trail of every activity recorded on the platform, it becomes the ‘books and records’ for regulators, equipping them with a simple mechanism to audit and examine data.”
Our data team ensures data integrity by flagging anomalies
Recently, ComplySci took up an exhaustive research project that required quantifying the benefits of the platform for one of its clients. The objective was to mitigate the time spent on monitoring employee activities and extracting data for insights. On concluding the research project, ComplySci compiled a research report encompassing the effective implementation of the ComplySci platform and a strategy to simplify the process of automating the preclearance, self-reporting, and certification. The report illustrated several improvements such as saving 70 percent of the time spent on monitoring activities, 60 percent in extracting data to generate actionable reports, and 95 percent in onboarding and off-boarding employees.
By leveraging artificial intelligence and machine learning, chief compliance officers are freed from having to dictate the rules and policies all the time, allowing them to customize the approval process to their convenience. Besides, they can assign a score to risky employees, and accordingly tweak the workflow to enforce compliance on them. By the end of 2019, the firm plans to introduce an intelligent graphical reporting feature in its platform to make reporting more predictive and sophisticated. “We continue to focus on being more data-driven by combining a proactive approach and compliance with the world-class services and support,” says Levy.