In the financial industry, a firm of any size requires a financial compliance officer. The compliance officer is charged with the task of insuring the financial firm and clients complies with applicable federal, state and local laws and regulations. If the firm is larger, it will most likely have a compliance department, rather than a single officer.
The financial industry most likely became more complicated, with the recent passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Though the act places most of its emphasis on larger banks, products such as derivatives and swaps are now subject to regulation by the Securities and Exchange Commission and the Commodities Exchange Commission. New regulations will be forthcoming.
The jobs of compliance officers and compliance departments just became more complicated as it has for everyone in the financial industry. This is where financial compliance software will play a large role. To ensure compliance officers can thoroughly do their jobs, well integrated financial compliance software will become a necessity, if it has not been already.
The task of your compliance department will be demanding enough in preparing for new regulations; they cannot be tied down performing manual, repeated tasks for periodic filings without some form of automated software.
There are features that should be considered essential in any financial compliance software package:
Automated– the central purpose of any financial software is automation, to make the job of those from the financial compliance department to the data input department easier. It should make generation of forms to be filed with regulatory agencies be prepared as easily as possible.
Integrated– the software must be adaptable to your database, rather than your database becoming adapted to the software. Unless, your financial software is grossly outdated, the software should merge as seamlessly as possible with your present software.
Accurate– Since the purpose of purchasing financial compliance software is to insure correct regulatory filings, and with the cost of correcting mistakes, the software should be written by a reputable company, well versed in regulatory scheme of your particular financial service. Equally as important, the software should have a demonstrated history of timely updating as regulations change and regulatory decisions are made. This will be important in the near future as new regulations are written for the Dodd-Frank Act.
Self correcting- The software should have the ability to catch errors in both processing, as well as alert the user of when a transaction will be in violation of an applicable regulation. There will be those in the company, for instance those in the data processing area, who may not be familiar with all regulations, especially those which will come about in the near future. Alerts should be made noticeable to the user at first instance, with options available for resolution. An added option may be to send an automated notice to the compliance department, with a request for review.
Financial compliance software products may have once been considered merely a time saver in the past, a method of automation for repeated tasks. With newer regulations coming in the not too distant future, it can be used as a method of avoiding costly mistakes, of automatically integrating the newer regulations, minimizing the need for repeated seminars, meetings, conferences and other costly office training methods.