Five trends driving compliance automation in wealth management


Tuesday, October 26, 2021 | By Karen Astley, Director

Five trends driving compliance automation in wealth management

The use of intelligent automation in wealth management has been growing for a while now.

Originally seen as a way to enhance the client experience while also controlling staff growth, lower operating costs and reduce errors, many are starting to see the role automation plays in regulatory compliance as well.

Because compliance relies on data that is often collected from disparate systems, the manual processes that have long been the standard are particularly error-prone and expose firms to the risk of penalties.

But that’s not the only trend pushing wealth management firms toward intelligent automation.

  • Remote work is likely to remain the norm. After more than a year of living in a work-from-anywhere world, many firms are adopting a hybrid model where employees divide their time between working in an office and working elsewhere. However, without the safeguards of an established office environment, the multiple locations of a hybrid model come with some serious compliance concerns.
  • Financial regulation isn’t slowing down. There will always be new rules to protect investors, and wealth managers must stay on top of existing regulations, as well as making sure the entire organization is prepared for new changes as they arise.
  • Regulatory enforcement will increase. As regulation continues to increase, so will enforcement, to the tune of $4.68 billion in fines and penalties in 2020 alone.[1]
  • Consolidation continues. Mergers and acquisitions have maintained a steady pace for more than a year, and with those consolidations comes an increase in disparate systems and a wider disconnect between internal compliance procedures.
  • The cost of weak compliance is rising. In addition to the obvious cost of fines and penalties that may arise, there are also the less quantifiable costs of cybersecurity breaches, business disruption and reputational damage.

The challenges these trends present can all be addressed with automated solutions that empower compliance teams to improve productivity and efficiency through document automation, workflow technology and better communication between disparate systems.

To learn more about how automating compliance processes can help wealth managers reduce risk and costs while improving efficiency, download our "Why Compliance Automation is a Priority for Wealth Management: 5 Good Reasons" whitepaper.

 

[1] https://www.sec.gov/news/press-release/2020-274



APAC, Asset Management, EMEA, Wealth Management


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