The Compliance Platform Challenge: Changing Vendors

Rating your current vendor and what to look for in a new one

In part one of this blog series, we talked about switching out your legacy in-house compliance platform to a vendor platform. The theme was overcoming inertia: the formidable inertia of an institution that’s been operating a certain way for a long period of time. We laid out the benefits of making the switch, and armed you with key themes to present in your meetings with potentially hesitant stakeholders and IT departments.

This blog looks at a similar situation: making the change from an existing compliance vendor to a new one. It’s another case of overcoming institutional inertia, but with different concerns to address and different fears to overcome. We’ll get to that, and lay out key benefits and talking points for making a stress-free switch, but first it may be worthwhile to help you identify if the vendor compliance platform you’re currently using is failing you, or is in danger of doing so. The following five questions aren’t the be-all, end-all but are a good place to start in making the assessment.

RATING YOUR CURRENT PLATFORM

1. When was the last platform upgrade?
Think about how often you get smartphone operating system upgrades, operating system upgrades for your laptop or desktop, or app upgrades. Software is technology, and technology is forever on the march.

Conscientious companies and sharp developers are always thinking about ways to make their applications work better, whether they’re responding to changes in the marketplace, changes in technology, evolving security concerns, or, in the case of compliance vendors, changes in regulation. OS tweaks and platform upgrades should be a celebrated fact of life with your compliance vendor.

Unfortunately, it’s not uncommon for a vendor to make promises they don’t intend to keep. If you’ve been promised upgrades from your current vendor but have yet to seen any, it’s worth considering whether or not you ever will.

2. Is there a product roadmap in place?
Like technology, business never stands still. Or shouldn’t. Companies that stay around are companies that do their jobs well, which means thinking ahead and always devising ways to improve their product and serve their customers better.

As such, any compliance vendors worth their salt should have a product roadmap. And they should be eager to share it with prospects or clients as clear evidence of the kind of strategic thinking necessary for keeping their clients operating safely and with integrity.

3. Are you struggling to keep up?
As your business has grown, are you devolving back to manual compliance processes because your system doesn’t have modern capabilities? Like the ability to manage multiple business lines or groupings of people who may all need slightly different treatment?

Has end user adoption has been a challenge because the solution isn’t user-friendly? Are most people still submitting things manually or perhaps not at all?

Are you losing track of all the attestations your employees are required to have in place? If any of these sound familiar, or spark the memory of a similarly uncomfortable situation, the compliance platform you have in place may not be up to the job anymore.

4. Is it a challenge to identify questionable activity?
The whole point of compliance software is to make detecting compliance issues as automated, and therefore as easy, as possible. And while compliance issues don’t necessarily jump out and announce themselves as such, there are known problem areas.

A good compliance platform turns your code of ethics into actionable rules, catching potential problems in the earliest possible stages. In addition, it will provide you the kinds of tools and data that will aid in researching questionable activity—allowing you to escalate or close cases quickly, instead of spending hours or days on a single individual’s activity.

5. Is it a challenge to monitor and investigate questionable activity?
With a well-designed and well-built compliance platform, it shouldn’t be.

To some degree, monitoring and investigating will always be a manual process. But that process will be significantly enhanced by the technological leverage a modern compliance platform inherently brings to the table—providing you the wealth of data, analytics, background history, and reporting capabilities needed to maintain a 360-degree view of pertinent firm and employee activity. Compliance teams still need to put the puzzle together, but a good platform will provide the pieces.

SWITCHING VENDORS STRESS FREE
When it comes to switching from an existing compliance platform vendor to a new one, two overriding concerns, and sources of anxiety, are migration and integration.

Migration entails bringing over all existing data, accrued over years of being in business, to the new platform and hoping everything comes over uncorrupted and intact. Integration means making clean and seamless connections from the new platform to all other existing company data systems, like CRM and HR systems, firm-trading and open-order systems, expense systems, and broker feeds.

Another source of anxiety can be the simple notion of embarking on what seems like an inescapably herculean task. “New clients usually have several concerns,” says StarCompliance Senior Business Analyst Kelsey Amar. “The years of transactions they’re desperate not to lose. Ensuring that the hard-won broker feeds are brought over properly. But also getting all the requirements straight for the building and testing of the platform.”

Any and all of these stressors can quickly dash the hopes of switching compliance vendors, especially when the IT team gets its say; they will, after all, be heavily involved in any switch. Overcoming fears and institutional resistance so a vendor change can be made means not just finding a vendor that makes a great compliance product but finding a vendor that also possesses mastery of the transition process.

WHAT A WELL-MANAGED SWITCH LOOKS LIKE
Every compliance platform vendor is going to operate a little differently, but there’s a thoroughness and logic to any well-executed installation. Following is a sample walkthrough—an A-Z example of what you can expect from a compliance platform vendor with a depth of knowledge and experience, and the kind of crack transition team that can put it all to proper use.

1. After a product demo, discussion of a general direction, and an agreement to move forward, there’s a kickoff meeting. A timeline is provided which tells the client everything needed to begin the build process.
2. The vendor schedules a deep-dive, where a small team of implementation experts goes onsite with the client for further, in-depth information gathering.
3. The vendor prepares a document based on everything that’s been gathered and discussed to this point, so there’s no uncertainty regarding what client and vendor have so far seen and agreed upon.
4. The client is then sent another document to further flesh out requirements. This will translate the client’s specified rules, processes, and code of conduct into what will ultimately be their new compliance platform. Every aspect of the coming build is mapped.
5. The client signs off and the vendor begins the build.
6. When the initial build is finished, the vendor thoroughly tests everything internally.
7. The vendor provides the client a testing site. This site exists completely in a test environment. Nothing is live. The client is still using its legacy system at this point.
8. Vendor and client meet again to develop a testing plan. Together they develop scenarios both sides feel will realistically simulate what the client will face when the platform is live.
9. There is a user-acceptance phase. Again, this takes place purely in the testing environment. This is where any needed corrections are made and the new platform is fine tuned.
10. Finally, the production environment is prepared. When both vendor and client feel at ease with where the new compliance platform is, it goes live.

BUT WAIT, THERE’S MORE
Or there should be. A good compliance vendor will do everything that’s already been mentioned. A compliance vendor that’s a cut above will go a step further.

There’s a point in any software build process when the implementation team has to bow out. They’ve done their job, built a good product, and it’s time to hand the client over to support. There’s no getting around this, but it can make new clients nervous. This is where empathy and compassion on the part of the vendor can make all the difference.

“Eventually we have to cut the cord,” says Star’s Kelsey Amar, “but we try to be as gentle as possible. We have a client meeting and do a two-week soft transition. Support is slowly looped in. By the end, clients know they’re in good hands. Star takes pride in ensuring the migration process goes smoothly. My department, Professional Services, is entirely dedicated to managing the transition: start to finish.”

ALL VENDORS ARE NOT CREATED EQUAL
Software transitions are never entirely welcome. Whether you’re an individual making the switch from Microsoft Word to Apple Pages, or an enterprise financial institution switching compliance systems, software is a tool and what’s ultimately required of a tool is that it does its job so you can do yours. But fear of change is never a good reason to stay with something that’s not working, especially with something as critical as a compliance platform.

But if yours is no longer doing its job, don’t automatically assume a switch will be arduous. It’s all about selecting the right vendor, one that understands the anxiety associated with making such an important change and hangs its hat as much on this part of the business as any other. Use this blog and the information in it as a guide to the kind of things you should be seeing and hearing from a potential new vendor.

Then, book some demos. Conduct some interviews. Ask lots of questions. Go back and forth until you feel comfortable with the people and the process. At that point you’ll have found the right compliance platform vendor, which will ultimately make any effort on your organization’s part worthwhile.

Looking for guidance on making the switch from in-house to vendor? Check out part one of our two-part blog series on the subject: “The Compliance Platform Challenge: In-House To Vendor”

David Rowland

As CTO of StarCompliance, David oversees the company’s technology footprint—how Star products and solutions are delivered to market as well as the firm’s internal corporate technology. David joined Star in 2020 after 19 years at Morgan Stanley, where he was Global Head of Technology for some of the bank's largest revenue-generating businesses—including Sales & Distribution, Investment Banking, and Capital Markets—and where he regularly delivered enterprise-ready solutions that scaled to the needs of thousands of users. David earned his Bachelor of Science (BSc), Computing for Business, at the UK's University of Northumbria.