Episode 99: Using Compliance Technology to Manage Books and Records

On episode 99 of the CCO Buzz, our Sr. Compliance Consultant and Technology Specialist discusses how technology has become an integral part of effectively managing a compliance program and how different solutions can assist in recordkeeping and monitoring.


CCO Buzz: Hello and welcome back to the CCO Buzz. Can you believe it’s already the third quarter? Where has the time gone? Before you know it, we’ll be discussing yearend prep and all the additional considerations for your Form ADVs – 2022 is flashing right before our eyes, how can we even keep up?

Speaking of keeping up, today we’re joined by one of our new team members, our Senior Compliance Consultant and Compliance Technology Specialist. He is here to discuss his first article with Core Compliance, “Managing Books and Records Through Technology.” His piece is centered around the growing importance of technology within service models and how firms can and have leveraged platform tools to enhance, manage and maintain their compliance programs, specifically with recordkeeping and monitoring.

With that, let’s begin…

So, Ji, this may be a silly question because technology is such an essential part of our everyday lives, but throughout your career in compliance – how big of an impact has evolving technology had on the compliance industry?

Sr. Compliance Consultant:  Not a silly question at all. Throughout my career, I can say that technology has become a growing platform in the industry and is, now, an essential part of compliance. In my experience, I can say that majority of successful compliance departments leverage a technology tool or platform in one way or another.

CCO Buzz: That’s interesting, but not surprising. I can’t function or go so much [as] a day or two without my cell phone – why not leverage technology to make my job or maintaining a system easier. Throughout your article you detail basic features in most compliance technology platforms, regardless of provider or platform, and how they can assist in maintaining compliance protocols, mind sharing or elaborating for our listeners?

Sr. Compliance Consultant:  Not at all. One key component of compliance technology that is applicable across the board is the ability to manage, maintain and monitor. Whether it be for filings, books and records, electronic communications, archiving, – most compliance technology platforms will empower users to leverage their tools and technology to maintain their systems.

CCO Buzz: So, when you say books and records and electronic filing communications– I’m generically imagining a cloud-based document management system, similar to many non-compliance platforms out there, what makes a compliance-focused technology tool different?

Sr. Compliance Consultant: Yes, what you imagine is very similar, but the difference is they are built and designed for compliance. Any document management system will contain, organize, and manage your documents and records- but these systems are built specifically to address the regulatory requirements of the industry.  For example, under Rule 204-2 of the Investment Advisers Act of 1940, better known as the “Books and Records Rule,” registered investment advisers are required to maintain and preserve certain books and records. These must be in an easily accessible place for not less than five years – that’s where compliance technology comes into play. Not only does compliance technology maintain and manage all of this, but it also has the capacity to be built for the firm, their business model, and how they operate.

Some other ways that firms can leverage compliance technology include the enablement of timely response when it comes to requests from regulators, ease of performance for required periodic testing, and compliance technology also provides an avenue for the implementation of safeguards and preservation from loss, destruction, alteration, and unintended breaches- heightening a firm’s cybersecurity and data protection protocols.

But that’s only the tip of the iceberg. With the advancements of compliance technology today, along with the varying methods of investing. It is only a matter of time until compliance programs are foundationally built on a compliance platform.

CCO Buzz: Hmmm, that’s interesting you say that. Earlier you mentioned, as well in your article, the power compliance technology has outside the brick-and-mortar office walls – specifically when it comes to communication and social media in our new remote-forward environment. I may be unaware, but how would a firm leverage a compliance technology tool in that realm?

Sr. Compliance Consultant:  Who can deny the growing influence social media has in today’s market? As users are becoming more active and audiences become more diverse, firms are embracing social media and its ability to accelerate and expand its marketing footprint.

With expanding social platform audiences, the sky is the limit, but considering the new Marketing Rule, the SEC has finally entered the social media discussion and provided some guidance on social media use by advisers and their employees.

With the release of the new Marketing Rule, the SEC recommends that advisers consider adopting and implementing policies and procedures prohibiting the use of personal social media by employees to market advisory business. While the SEC has provided general guidance on how compliance officers can achieve supervision and compliance, firms can leverage both performance and documentation with an appropriate compliance technology solution.

CCO Buzz: Wow, sooner or later technology will be managing and maintaining most components of compliance, don’t you think?

Sr. Compliance Consultant:  Funny that you say that, I feel compliance technology is really at the core of every successful compliance program. There are truly comprehensive tools that service the industry in multiple ways that not only aide in compliance measures, but also business and service offering. I’m someone who believes in working smarter and not harder. Compliance is a leverage point for protecting your clients and your team – so, why not have tools in place to assist.

The team at Core Compliance is familiar with the various types of technology solutions, like Orion Compliance, GlobalRelay, Telemessage, and more. We can provide strong recommendations and assistance with implementation and ongoing administration of your compliance program. For more information, or if you’d like to discuss anything further contact us at www.corecls.com or at 619.278.0020.

CCO Buzz: Wow, you wrapped that up quite nicely. Before you go, is there anything else you’d like to discuss?

Sr. Compliance Consultant:  Yes, one last thing. It is important to note that not all compliance technology solutions are all built the same. Depending on your firm’s needs, budget, and organizational structure – your compliance technology solution will need to work alongside your team. The team at Core Compliance can assist in understanding your needs to develop a comprehensive compliance organizational strategy that empowers your team, saves time and effort, and makes compliance and service seamless.

CCO Buzz: Well that’s it for this week’s episode. If you’d like additional information, please check out our website at www.corecls.com. You can also follow us on Facebook, LinkedIn, or Twitter @CoreCls. Thank you, and we hope you tune-in to next week’s episode of the CCO Buzz.


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