7 Essential Features to Look for in Compliance Management Solution

Compliance Management Solution

By Michael Berman

Compliance management is a complex, time-consuming process that requires meticulous organization and constant vigilance. Financial institutions must have a compliance management system (CMS) in place to ensure they are meeting their regulatory obligations. If they neglect using solutions, there can be several negative consequences, including: increased risk of non-compliance and operational inefficiencies, higher costs due to their reliance on manual processes and resources, decrease in customer trust because of negative publicity and reputational damage, and limited growth opportunities since a financial institution cannot offer new products and services or expand into markets. 

More and more institutions are turning to compliance management solutions to help streamline and automate their compliance processes. But with so many options available, how do you choose the right one? In this article, we’ll explore the seven key features you should look for when selecting a CMS software solution.

1. Customizable and industry-specific

Compliance management solutions should be adaptable and customizable to your financial institution’s specific needs, size, complexity, and risk profile. Out-of-the-box solutions may not provide the flexibility required to address your unique compliance challenges. When evaluating compliance management solutions, look for solutions that can adapt to changes in your institution’s strategic direction, such as new products and services, new markets, or acquisitions.

2. Ease of use

A user-friendly compliance management solution is essential for ensuring that your staff will use it effectively. If the software is difficult to navigate or manage, people may revert to manual processes like Excel spreadsheets, undermining the benefits of the CMS. Take the time to evaluate the usability and intuitiveness of potential CMS solutions to ensure they will genuinely simplify your day-to-day compliance management tasks.

3. Updates to keep pace with regulatory change

Regulations change constantly, and your CMS software should help you stay up to date with the latest developments. It should provide timely updates on both proposed and final rules, allowing for efficient planning and collaboration. When evaluating CMS software, inquire about the frequency of updates and how quickly you’ll be alerted to regulatory changes. Daily updates are ideal.

4. Alerts for proposed and final rules

A comprehensive CMS software solution should keep you informed about potential regulatory changes, not just final rules. Being aware of proposed rules can inform your institution’s strategic planning and decision-making. Additionally, some institutions may wish to provide comments on proposed regulations, making it essential to be informed about them in a timely manner.

5. Documented and audit-ready compliance activity tracking 

Your CMS software should make it easy to document and demonstrate your compliance efforts to regulators, auditors, and other stakeholders. It should provide robust tracking and logging features to capture who performed specific tasks, when they were completed, and the rationale behind decisions. Evaluate the tracking and logging capabilities of potential CMS solutions to ensure they meet your institution’s requirements.

6. Collaborative communication

Effective communication is crucial for compliance management, as every employee and board member has a role to play in ensuring regulatory compliance. Your CMS software should facilitate communication across business units and streamline the policy review process. Investigate the communication features of potential CMS solutions, such as policy review workflows, notifications, and collaboration tools.

7. Centralized storage and organization

Compliance management involves a vast array of policies, procedures, and documents. Your CMS software should provide an organized, accessible system for storing and retrieving these documents as needed. This will save you time and frustration when preparing for examinations, audits, or internal reviews. Evaluate the document management capabilities of potential CMS solutions to ensure they can efficiently store and organize your compliance documentation.

Finding the Right CMS Software for Your Financial Institution

By focusing on these seven essential features, you can narrow down your options and find the financial services compliance software solution that best meets your financial institution’s needs. 

A well-designed, customizable, and user-friendly CMS solution can significantly enhance your compliance management processes, making it easier to stay on top of regulations and maintain a strong compliance posture.

About the Author

Michael BermanMichael Berman is the founder and CEO of Ncontracts, the leading provider of SaaS-based risk management and compliance solutions for more than 4,000 financial services companies.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.