CAN COMPLIANCE PROFESSIONALS COMPLY
IN THE SAME WAY?
Sure, computers are great for making light work of complex tasks, but there’s always a catch: They only do what they’re told to. Precisely and only that. So, if a digital tool produces less-than-optimal results, chances are good the problem is in what it was told to do in the first place.
And that’s where a particular global investment manager found itself with a specific module within its order management systems (OMS): This module—responsible for monitoring investment restrictions—was throwing out false warnings and alerts. And not in just one region, but all over the place. How come?
Because the systems were following directions! The company’s operating model for investment compliance monitoring (ICM) was distributed rather than centralized, meaning people without context for the other parts of the business were giving the ICM disjointed directions, leading to duplicate—and possibly incomplete or inaccurate—rules. These employees didn’t have a shared understanding of roles and responsibilities for investment compliance work, so there was a lot of process duplication, not to mention unnecessarily high staffing costs.
Getting these issues in hand would mean nothing less than overhauling the ICM operating model: reengineering organizational structures, processes, data, technology, and governance systems around compliance. Besides clarifying who should really be doing compliance work, a new target operating model would also need to describe how that work would be done. (How, for instance, would jurisdictional compliance responsibilities be assigned for global products?) Finally, all rule sets within the manager’s various OMS—both compliance and investment—would need to be revisited. This would be a heavy lift.
WORKING TOGETHER MAKES FOR LIGHT WORK
Through its collaboration with Deloitte, the investment manager’s newly designed operating model for ICM clarified roles and responsibilities across the function and distributed work globally, thus reducing work duplication and bringing down staffing costs. These changes—when paired with streamlined, auditable OMS rules on a global scale—removed the source of false warnings and alerts. The systems were now being given the proper directions.
Work on ICM-related tasks was set apart as a specific function in the new model; the resulting resource realignment reduced full-time employee allocation by 25%.
Rule coding for the OMS was accelerated through a new, robust process for delivery of standardized investment restriction requirements, mitigating a high residual risk item for the company.
To maintain global oversight and governance of compliance, a net-new, low-cost shared service center for rule coding, testing, and ICM maintenance tasks was created overseas.
The OMS were streamlined such that all EMEA products and accounts—as well as a significant North American population—benefited from a recoded rule inventory; a 50% reduction for those accounts overall.
Do these challenges sound familiar?
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