Last year we launched a successful campaign called The Great Crash which focused on the cyclical nature of regulatory failure and how markets work through them. We looked at the characteristics, interviewing former compliance officers from Lehmans, economists and former Moodys executives. What is interesting in any cycle is the way in which markets rebound and how quickly the period of reflection and reform turns into more cork popping and back slapping. The fact is that the markets needed that period of reflection to think carefully about how to avoid a repeat crash. Some call it a double dip but it's actually more concerning than that. It's the fact that the markets have not really taken stock of the market failures and put in place controls to avoid another occurrence. The truth is that markets will rise and fall and in that process there will be winners and losers. The real question though is how satisfactory is this recovery? How authentic is it and what have we learnt in this most recent cycle? We have a survey in place to ask these types of question for the launch of our new campaign in January titled The Forgotten Crisis. You can complete the survey here.
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The Forgotten Crisis
Last year we launched a successful campaign called The Great Crash which focused on the cyclical nature of regulatory failure and how markets work through them. We looked at the characteristics, interviewing former compliance officers from Lehmans, economists and former Moodys executives. What is interesting in any cycle is the way in which markets rebound and how quickly the period of reflection and reform turns into more cork popping and back slapping. The fact is that the markets needed that period of reflection to think carefully about how to avoid a repeat crash. Some call it a double dip but it's actually more concerning than that. It's the fact that the markets have not really taken stock of the market failures and put in place controls to avoid another occurrence. The truth is that markets will rise and fall and in that process there will be winners and losers. The real question though is how satisfactory is this recovery? How authentic is it and what have we learnt in this most recent cycle? We have a survey in place to ask these types of question for the launch of our new campaign in January titled The Forgotten Crisis. You can complete the survey here.
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Compliance by Intravenous
Compliance departments around the world have logged into our site to get daily updates on rule developments and enforcement actions but something has changed since the Great Crash of 08. Firms need to get a direct feed of all of this risk and compliance information and plug that directly into their own systems. Imagine you're a firm with a risk management platform that tells you which products you sell around the world. Well when a rule changes somewhere, anywhere, that will probably have an impact on one or more of those products. It can require a simple change in marketing materials or may actually require you to change the structure of that product. It's a tricky thing to get right because you want to keep everything on the market while staying in line with the rules. Complinet launched DIS (this stands for Direct Integration Service). Not an overly complicated name - In short, we pipe all of that rich information directly into any system you may have (from Protiviti or Sharepoint) so when a rule changes it is mapped through a global categorization system into those product descriptions and flags the relevant products accordingly. Bigger clients are engaging first but smaller firms will also need to get this done in due course.
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The Queen and I - on Bloomberg TV
I was recently asked to discuss the Queen's speech on Bloomberg as a number of elements covered talked about regulatory reform. I was very pleased to be asked and like that Complinet is emerging as an industry voice in the market. You can see the video on youtube. The speech talked a lot about trust and sustainability and it got me thinking once again about how cyclical the regulatory cycles are. I remember as a kid there was a road where our parents always said 'one day there's going to be a terrible accident on that corner'. For the longest time there was a petition to get a new roadsign and crossing lights but the local authority never provided it. Of course, one day the inevitable happened and there was a fatal accident. Within four weeks the signs were up as was a new crossing light to warn of a sharp turn ahead. I suppose it's human nature to react to this type of thing rather than take preventative action but financial markets can do a better job of prevention versus post mortem.
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I love twitter. I only really got it when someone explained this as 'micro blogging'. Since then we have set up two corporate twitter sites (complinet and complinetjobs). We're getting quite a nice following on both and actually spend a lot of time commenting on our various events like our customer summit and awards events. For people who are busy this is a nice way to get short bursts of information from us. We also link our RSS feeds to twitter too. On a more personal level I have a twitter site called @manhattanlife which I keep up. I am hooked.
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Screening in Asia
One of Complinet's products helps firms screen employees or clients against sanction lists and PEPs and so on.. We've done a very good job in the US and UK as well as English speaking parts of Asia and the Middle East (Singapore, Hong kong and Dubai). We're now looking into mainland China and the challenge is daunting.
I knew the size of the population would be a key factor and of course language but the lack of name variance is a new challenge for the filtering engine. Got me thinking about how a population that size would cope with due dilligence, KYC and general anti money laundering. We're working with local partners but it is clear that the opportunity is matched by the size of the challenge. Interesting new translation tools available from Google that are incredibly impressive so we'll have a viable offering for those markets too.
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The Asian Market
One of Complinet's products helps firms screen employees or clients against sanction lists and PEPs and so on.. We've done a very good job in the US and UK as well as English speaking parts of Asia and the Middle East (Singapore, Hong kong and Dubai). We're now looking into mainland China and the challenge is daunting. I knew the size of the population would be a key factor and of course language but the lack of name variance is a new challenge for the filtering engine. Got me thinking about how a population that size would cope with due dilligence, KYC and general anti money laundering.
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Regulation versus oversight
Met with the head of the Enterprise Data Management Council (www.edmcouncil.org) over lunch. His view of regulation versus oversight was an interesting one. He explained that in his view regulation was a set of rules that govern the way firms should operate whereas oversight was the process by which firms ensure adherence. I know it may seem like semantics but I liked the idea that firms needed to think more, not only about how they follow the rules but more about how they operationalize this for a competitive advantage. At the very least firms need to understand how to address these regulatory requirements while rapidly delivering highly competitive products to their markets before anyone else. I suppose in a lot of ways, the way firms meet regulations, how they might automate these process and how they build this into some form of workflow to provide evidence of their adherence is the difference between putting a tick in a box and world-class risk management. Will be interesting to see who the winners will be in this world of new regulatory reform.
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Middle East versus The West - Which banking model will prevail?
I grew up in the Middle East, Saudi Arabia to be precise and I was always fascinated by the cultural differences and social nuances as a child. I attended our GCC summit in Dubai (gcc-09) last year where the topic of Shari'ah banking was discussed in the context of the failures in 'western' banking. What was interesting was how Shari'ah is being held up as the new model given some of the ethical elements baked into this faith based system. Transparency is not a requirement it is a fundamental in a system that is all about sharing risk and owning the things you trade. Our webcast will look at the differences between the western model and islamic banking. (Islamic versus westing banking webcast). As with all things I suspect the answer lies in a balance between the two. What is clear is that the tone called for a more ethical and honest approach to how firms invest their client's money. Read More!
The 'very' hot topic of compliance...
Complinet is receiving a lot more interest from larger firms as they start re-thinking how to deal with the fallout following the market failure. So now, inevitably comes the regulator's reactions and reforms.The press are picking up that this is a hot topic as investors need to get some regained sense of confidence in the system and the controls firms put in place to manage risk. It's interesting to see how firms are addressing this challenge. Complinet is getting involved by putting our regulatory content, traditionally delivered via an on-line news portal, directly into a firm's risk or policy management system. The idea that firms can tie all those live rule changes into their control systems is critical not only to better understand risk but to communicate more effectively with regulators. Check out our recent media coverage (complinet's media coverage). There will be more information coming soon on what we are calling 'Direct Integration Service or DIS for short. Read More!
