While tools and trinkets are pretty, the key to proper regulatory compliance is attitude and information.
Last week, I moderated a particularly interesting webcast focusing on risk and compliance associated with risk management. All four speakers, from Streambase, SAP, RBS and Olympian, gave a lot of thought provoking contributions to the debate, particularly around methods of risk modeling and the enhanced role that technology plays in the way compliance and risk are being approached.
The audience, too, gave a number of interesting responses to the poll questions. Some of it was expected, in terms of increased spend towards compliance with regulatory mandates and a move to intra-day risk management, but all of it highlighted the acute pressures that financial services firms, on the buy or sell sides, are experiencing at the moment.
It seems that everything, eventually, is beginning to lead back to compliance. Whether it's from firm-wide damage due to fines and penalties for playing fast and loose with regulations, or through reputational damage thanks to rogue trading. The problem with the latter, of course, isn't just the initial financial hit that this practice seems to invariably result in, but the continued recycling of condemnation. UBS hasn't exactly come out of Kweku Adoboli's time on the dock smelling of roses, I think we can all agree, and SocGen hasn't done particularly well out of Jerome Kerviel either.
Time of the Technocrat
The simple fact is that compliance is no longer an institutional necessity, borne grudgingly, but an integral part of business now. Conversations I've had with people from all brackets of the industry have turned from propping up compliance functions with the bare minimum to actively, and in many cases, proactively, engaging with it through technology.
The importance of adequate surveillance, and the interest associated with inventive and novel ways of fulfilling that obligation are being underlined constantly. Just look at NICE's acquisition of RedKite, or Fidessa's recent Buy-Side Technology Award win for Sentinel for a couple of examples.
Conversations I've had with people from all brackets of the industry have turned from propping up compliance functions with the bare minimum to actively, and in many cases, proactively, engaging with it through technology.
Moreover, the enhanced use of straight-through processing, and the development of holistic risk management platforms that take an enterprise, rather than siloed, view of exposures and Chinese walls, are increasing the compliance options available. It all returns to the point of data, in the end.
We've spilled a great deal of ink in Sell-Side Technology, Buy-Side Technology, Waters, Inside Market Data and Inside Reference Data talking about data delivery and governance, and in an area where compliance is king, those conversations have never been more relevant. After all, you can have the fastest Ferrari money can buy in your garage, but as our friends and colleagues in New York have found recently, without gas it's just a very pretty object. The same goes for compliance systems; data is the most important asset a firm has. Ensuring the credibility, reliability and availability of important data is the key to ensuring good practice.
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
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