Data Best Practices For Today’s Compliance Officer
Take care of your data, and your data will take care of you. Why the old data-management maxim garbage in, garbage out is as relevant and meaningful as ever
Modern companies are data hubs as much as they are anything else. Data’s comings and goings into and out of the company and between-system interactions are as important as anything else that goes on in today’s enterprise financial firm. Recently in this space, we offered suggestions for keeping all this data safe. Today we’ll offer suggestions for taking care of this data—to maximize its accuracy, its reliability, its completeness, and, ultimately, its usefulness to you.
WORK THAT’S WORTH THE EFFORT
There’s a lot of data coming into your firm from lots of sources, internal and external. Whatever compliance platform you’re using, there are universal best practices for managing it better:
- If you’re adopting new compliance software—or any new software for that matter—take the time to examine, clean, and append the data that’s going to live in this new system. By knowingly dropping in stale, unreliable data you’re setting yourself and your new system up for failure. It may take more time than you’d like, but the end result will be a reliable data source you can depend on and move forward with.
- Cutting down on manual data entry—or even duplicate data entry—means taking advantage of data feeds, which most enterprise systems now offer. Data systems are designed to exchange information in the fastest and most efficient way possible. Take the time to set up these feeds and integration points between systems like expense records, CRM data, HR data, order data, and accounting data so information can move seamlessly between them. Feeds help maintain data integrity and eliminate the risk of human error.
- Leverage third-party data when and where you can to enhance your existing data and maximize possible insights. When it comes to spotting and getting ahead of employee and commercial conflicts, your data will only tell you so much. Trading data, securities and pricing data, broker feeds, and hi-impact news data can be powerful resources for your firm and can automatically surface conflicts that might have taken a human being hours or days to spot.
- It’s not enough to maintain the data itself; you also need to maintain the software it lives in. With each new software release comes new features and functionality that will enhance the way you slice, dice, examine, and manage your data. Install it. Train on it. Use it. With upgrades come a learning curve, but the end result of increased effectiveness and efficiency will always be worth the effort.
And when it comes to data feeds, while they’re typically your best friend, every now and again they too can take an unexpected day off. Data feeds are often viewed as one of those “set it and forget it” items, however, it’s important for you to check on these feeds frequently—to understand what your firm’s world might look like if a feed stops working and the data it’s carrying dries up. Establish a protocol if data is unavailable from a primary source. And consider if you’re being kept properly in the know when it comes to the data your company depends on:
- Do you get file-not-received alerts? If you don’t, these should be easy to set-up. Check your compliance software for this capability.
- Do you know the responsible party at your firm, partner company, or third-party vendor if there’s an issue with the feed?
- What happens if an expected file is missing? What’s the downstream impact? Who does it impact? Set up protocols and workflows in advance.
- Consider the impact of file-import errors. Determine which are tolerable and which are not.
SIX WAYS TO IMPROVE DATA QUALITY
Without good data any application is worse than useless, because it might produce false signals that lead you to believe all is well when, in fact, it’s not. Here are six ways to help ensure the overall quality of your data.
- LEVERAGE THE BROKER FEEDS
You may need to occasionally turn the heat up on a broker you work with to supply a trade-data feed. Feeds are expensive, and brokers have been known to avoid making the investment. Don’t rule out using employee convenience as leverage. Some of your employees are their customers, after all, and brokers have a vested interest in keeping their customers happy. Also remember that there’s strength in numbers. By joining forces with other firms you’ll be better able to persuade brokers to be more compliance friendly and supply the data feeds you need. - IMPLEMENT A ROUTINE
Once data is flowing, it must be checked. It’s important to implement a routine to keep pace with the daily volume. If you have a team at your disposal, a rotating shared-review process works well to stay on top of any unknown accounts and securities. But beware a common pitfall: once a compliance system is up and running, the state of the data feeds can fall off the radar. So long as the feeds are there, normally vigilant professionals may take their eyes off the data-quality ball as more “pressing” matters demand attention. Stubbornly stick to the routine. - UTILIZE REPORTS FOR DATA CHECKS
A well-designed compliance platform provides reporting capabilities within the software itself—giving you a 360-degree view of the data you care about most. With the ability to run frequent, consistent reporting, you can more easily spot gaps and errors in the data and quickly identify if a feed is down, incomplete or inaccurate data has entered the system, or if data is missing altogether. So you’re not just keeping an eye on the data, you’re keeping an eye on how well your keeping an eye on the data. It’s all very meta. - LEVERAGE EXTENDED PROPERTIES
Every compliance team has a unique set of data points they want to attach to each employee’s profile. A good compliance platform allows for sourcing of data points outside of a basic configuration. This added flexibility in the system, known as extended properties, can be leveraged across the system and typically includes the ability to:
- Link the platform’s rules engine to additional data points so the system can make better automated decisions.
- Add color to the investigation process when questionable activities are surfaced.
- Surface questionable activity by leveraging additional data points.
- Automate the assignment of users to groups.
- Bring new fields into your reports.
- GUIDE THE USER
Do everything you can to make the compliance platform you have in place easy to use. The more intuitive a system is, the more likely people will actually use it and the less they will view compliance activities as an inconvenience. And more data means more system accuracy, which reduces employee and overall firm risk. Provide guidance at every possible point in the process:
- Add help and info banners at every user-interface level.
- Host training sessions and refresher courses throughout the year.
- Create short instructional videos for user reference.
- Create quick-reference materials and one-page guides.
- KEEP UP WITH THE TIMES
It wasn’t long ago that people’s workdays were spent in an office at their desks. Then came laptops, which allowed work to be done outside of office walls. Now a significant portion of the workforce relies solely on their phones to complete tasks while on-the-go. Take compliance to them by making sure the compliance software you have in place offers a native mobile app, with functionality equal to that of its desktop equivalent. A mobile compliance solution will also help you improve overall data accuracy and increase employee participation and response times.
Compliance Control Room Handbook
