Control rooms are intense environments. They’re the nerve centres of big financial institutions, funnels through which all deal-related data must pass to be organised and analysed.
The teams of people doing this analysis are painfully small; typically five or six people, who must rigorously monitor the activity generated by thousands of deals simultaneously in motion.
And these already intense environments are just getting more intense as complexity in day-to-day firm operations and regulatory pressure are on the increase. But complexity can mean chaos, which can result in lost deals, if they aren’t cleared quickly enough, and lost reputations, if conflicts result in regulatory action.
New technology is set to change all this and the notion is evoking an enthusiastic response from the beleaguered compliance staff working these high-pressure jobs.
This gets to the heart of the matter: given the importance of control rooms, there’s been surprisingly little investment in the kind of cutting-edge software that could ease the manual burden on control room teams and really help improve this critical compliance function.
Money has been spent on know your customer or anti-money laundering systems, yet at some of the biggest firms, compliance control rooms are still run using email chains and spreadsheets.
Proper monitoring means being able to record a range of information, from material non-public information, to unpublished price-sensitive data, to conflicts of interest among trading staff, to research notes from analysts.
Frankly, Excel just won’t cut it anymore. The answer, like with so much else these days, is software: automated solutions which can collect and make visible a range of important information.
Well organised “watch” and “restricted” lists are also critical to an effective control room, but all too often the sheer quantity of data is overwhelming. Software can help keep these lists current and the flow of data manageable, and therefore keep a bank’s dealmakers competitive and the company on the right side of regulators.
In today’s global village, financial companies may be geographically dispersed, but regulators around the world are converging, with similar legislation in different countries aiming to stamp out poor or unethical behaviour.
There’s a growing challenge from regulators, whose political masters are keen to demonstrate that lessons have been learnt from the scandals and crises of the past decade, to detect insider trading or breaches of information originating from research departments. And they’re increasingly willing to make an example of any company that fails to meet their high standards.
Letting control room teams try to do so with outdated systems or inadequate investment is a serious risk to the future of any financial organisation. Control room software needs to integrate seamlessly with other systems, such as trade order management and employee compliance.
It needs to be able to plug into client relationship and human resources data. It needs interfaces that are user friendly and intuitive. It needs to ensure tasks don’t get stuck in a compliance dead end, limiting the activity of traders and analysts. It must provide a clear audit trail, and be able to demonstrate efficient and effective decision-making, not only to the board, but also, if necessary, to the regulator.
Technology provides the perfect solution to the complex and intense needs of the modern financial compliance control room. StarCompliance is one of the few global compliance software solution providers working to address this burgeoning need for a comprehensive control room product.
Deal complexity and regulatory scrutiny may be on the rise, but solutions like Star’s Compliance Control Room go a long way towards enabling control room teams to clear deals faster with less risk, all from a single platform, and in the process streamline the entire compliance control room function.
It’s time for compliance to step away from the spreadsheets of yesterday into the automated software solutions of today.
For more information please visit www.starcompliance.com/ccr
