In the financial services sector, tracking employee compliance such as licensing, registrations, and continuing education is a complex task.
According to MCO, traditional methods like spreadsheets might seem cost-effective and straightforward, but they struggle to manage the variety of licenses and educational updates across a firm’s workforce.
The initial phase of employee onboarding reveals the cracks in manual systems, where new hires cannot begin work without proper licensing, leading to a significant waste of time and resources.
This manual approach often results in costly delays and even regulatory penalties, exemplified by a financial institution fined $1.25m by FINRA for delayed background checks.
Ensuring that new hires meet all requirements is just the start. Maintaining employee qualifications, such as regular renewals and ongoing education, is an ongoing process, complicated further by multi-state and global operations.
Different regions have varied regulatory demands, adding layers of complexity to compliance processes. For example, a UK broker was fined $150k by the U.S. National Futures Association for not adhering to testing regulations, highlighting the risks of non-compliance across jurisdictions.
Ongoing tracking doesn’t stop with ensuring that qualifications are current. Firms must also monitor ad hoc changes like address or job role updates throughout the year. Sinead Egan, Product Manager at MCO, notes the difficulties firms face when relying on outdated methods for updating and tracking employee data. Without efficient technology, crucial updates can be delayed or missed, leading to compliance gaps and potential fines.
To comply effectively, firms need to manage multiple components, including tracking and updating licenses, registrations, and exams, ensuring all are current across every jurisdiction. Challenges arise when firms use disparate tools, leading to inefficiencies and oversight gaps. Automation can streamline these processes, enabling employees to manage their compliance responsibilities more effectively and allowing compliance teams to focus on strategic tasks rather than administrative follow-ups.
Integrating compliance technology with HR systems like Workday can reduce errors and duplicate efforts. A unified platform that manages licensing alongside other compliance activities can provide a comprehensive view of an employee’s compliance status, facilitating timely interventions for lapses or discrepancies.
This integrated approach not only simplifies data management but also enhances the ability to identify and address compliance issues proactively.
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