Why Compliance Automation is a Priority for Wealth Management

Why Compliance Automation is a Priority for Wealth Management

SS&C Technologies Holdings, Inc. has released a whitepaper titled The Top Five Drivers of Compliance Automation for Wealth Management Funds. This report highlights the issues wealth managers face if they continue to lag in automating their compliance operations.  In addition, it explores the five key trends fuelling the urgency for compliance automation in the wealth industry.

While the major benefits for wealth management firms who have automated operations to deliver a high-quality client experience have been well documented, the SS&C whitepaper explains automation has yet to gain a foothold in regulatory compliance.

In providing an overview of the report, Sydney-based Karen Astley (pictured), SS&C’s Director of Intelligent Automation Sales, APAC, says “While many wealth management companies, and really, this equally applies to superannuation companies in Australia, are busy automating their front office functions, the irony is that major efficiencies and cost savings could be made by using an intelligent automation platform in their compliance operations. As the world of data continues to expand exponentially, so too do the challenges around compliance. This paper explains that playing catch-up isn’t a linear pursuit. Every day you lag behind, it costs you more than a day to make up.”

Astley says risk control is often at the back of the queue when it comes to IT priorities. “At SS&C we are constantly surprised how many organisations don’t prioritise the automation of this area of business when compliance is often a disjointed process, reliant on data collected from disparate systems. It is this inconsistent data, lack of standardised procedures and incomplete audit trails that is the very thing that leads to errors and exposes firms to the risk of substantial penalties.”

The SS&C whitepaper explore in detail the five trends which it believes will expedite the need for compliance automation in the wealth management industry. These are:

  • Remote work remaining the norm which has implications for risk and compliance as organisations conduct business from multiple locations.
  • Increasing financial regulation as regulatory bodies look for new rules to protect investors in a rapidly changing environment.
  • Growing intensity of regulatory enforcement with more fines and penalties for companies that don’t have their compliance policies, procedures and records in order, including management of customer complaints
  • Continued consolidation of the wealth management and superannuation industry which requires the acquirer and the acquiree to ultimately combined portfolio accounting, compliance and other functions
  • Rising costs of weak compliance practices as firms regularly argue that regulation places an undue cost burden on them.

Optimising human performance 

The SS&C paper explains that while there is a common misconception around automation and that it is designed to reduce overheads -largely through the replacement of people, in reality it is about reducing operational risk, accelerating processes, assuring accuracy and optimizing staff productivity so that employees are free from routine to focus on higher-value work.  It explains this is especially true in the wealth management where delivery of the ‘white glove’ service requires both skilled relationship managers and a strong operational backbone.

Astley says she hopes that when wealth managers are now reviewing their technology investments, compliance should not be overlooked. “ An intelligent automation solution that addresses the challenge of collecting, aggregating and standardising data from disparate systems will not only help firms reduce compliance risks and avoid penalties, but it will also make the work of compliance professionals much easier”, she says.


Please find attach the link to SS&C’s whitepaper: The Top Five Drivers of Compliance Automation for Wealth Managers