Restoring confidence through compliance

With the royal commission turning the spotlight on compliance in the financial services sector, regulators are starting to ask the hard questions when it comes to the technologies that firms have in place to ensure they’re doing things by the book.

The fallout from the royal commission into misconduct in the banking, superannuation and financial services industries is forcing firms to reevaluate their approach to compliance, says Craig Mason, executive chairman of Australian software provider Complii Fintech Solutions.

As financial regulators step up efforts to hold the industry to account, Mason says the regulators will start to expect that firms have tools in place which ensure compliance is baked into workflows rather than treated as an afterthought.

“While regulators are never going to mandate any specific technology, it will get to a point where they expect a minimum level of technology in place to address compliance,” he says.

“They’re going to ask the tough questions when it comes to a firm’s level of visibility and oversight, to know how management is able to effectively manage the business when you’ve got such a fastmoving regulatory framework.”

One flow-on effect of the royal commission and Commissioner Kenneth Hayne’s report is likely to be fragmentation of the AFSL sector, according to Mason, with growth in boutique providers and fintech start-ups looking to disrupt the market. This growth in smaller players, some departing from large firms to hang out their shingle, is likely to bring compliance challenges, given there is no mandated technology obligation.

Starting as a Statement of Advice generator and client profile tracker, Complii has evolved into a full compliance and capital raising efficiency platform. Aimed at financial planners, advisors and stockbrokers, it has 3000 users across 40 firms.

Complii removes the need for paper-based compliance while automating, recording and reporting on AFSL and broker compliance obligations. The suite of automation tools pulls in client data for advisors to profile accounts accordingly with a centric electronic workflow.

It manages ongoing compliance while safeguarding that each account in a firm is traded in line with its profile, by creating a framework for compliance and management to be able to manage an entire organisation’s obligations in one view efficiently, and by ensuring that everyone is doing their part in the firm.

Complii’s technology provides a compliance framework, Mason says, “as well as a good night’s sleep for management, knowing they can rest assured with a compliant and efficient operating business”.

Traditionally, when it comes to capital raising, organisations have focused on closing deals first and worrying about compliance later. Tools like

Complii address this by incorporating

compliance into workflows, ensuring that capital raisings cannot be processed unless they meet compliance requirements.

“As a result of what’s gone on over the last few years, trust in the industry has fallen to an alltime low,” Mason says.

“We see these sorts of tools as an opportunity to demonstrate that clients are in a safe set of hands – if your advisor, dealer or brokerage firm is using a safe set of tools then you, as the customer, have more confidence in that.”

Complii’s recently launched Corporate Highway service creates a network between its clients for collaborating on capital raisings and IPOs. It offers its clients the ability to seamlessly and expediently complete larger deals with other brokers, confident they have a potential pool of advisors to fill what they can’t.

With the current focus of ASIC and ASX on spread, clients using the platform can make spread offers to capture bids and satisfy spread, all based on a compliant and efficient framework.

With the vast amount of deals clients put through Complii from all industry sectors, it offers the chance to establish new relationships and gain greater deal flow and spread across Australia.

“We’ve united our user base through this efficient technology, enabling them to do business through a compliant and efficient workflow without over-sharing sensitive information,” Mason says.

“It creates a broad network of firms that can share business opportunities without concerns over sharing client details, to ensure that everyone gets a good and compliant deal.”

Rather than simply being a cost of doing business, Mason says compliance tools can be the foundation of workflow enhancements and efficiencies which can help drive a firm’s bottom line. While turning onerous compliance obligations into a competitive advantage, they also ease the administrative burden, allowing firms to focus on business growth and revenue generation.

This process includes extracting business insight from the large amounts of data generated by advisory, corporate and trading activities, along with customers and their activities.

“Financial services might be a numbers game, but the traditional way of doing business often overlooks the important step of crunching the numbers to understand the business better and spot new revenue opportunities,” Mason says. “Once you’ve got these systems in place, it’s much easier to look for insight to help increase business.”

“We’ve united our user base through efficient technology, enabling them to do business through a compliant and efficient workflow without over-sharing sensitive information.” Craig Mason