Congratulations! You are now on the search committee for your firm’s next RegTech solution.

You know the crucial role technology plays in helping financial advisors improve efficiency and growth. And, you whole-heartedly believe that by selecting the right regulatory technology, your firm can streamline processes, automate compliance checks, and protect client data. But you also know that if you choose the wrong platform, you could set your firm’s productivity back — and financially harm the business as well. 

At Skience, we have spent decades consulting in the wealth management tech space, and we are here to help guide you on your search so you make the right decision the first time. Here are 10 things advisors need to know before choosing new RegTech.

  • 1. Understand your specific regulatory requirements

Ultimately, the RegTech you implement should help make compliance and all of your regulatory processes easier for your advisors and firm as a whole. But, first, advisors will need to have a clear understanding of the current regulatory landscape in order to select technology that will help them comply with laws and regulations. 

That is easier said than done with all of the ongoing changes to all of the requirements, so make sure you and your team are up on all of the new rules. A state-registered advisor will have different needs from an SEC-registered firm, who will have yet different needs from a firm that also reports to FINRA. 

  • 2. Think scalability

Buying a RegTech solution is a “point in time” decision. But that RegTech solution should not stay static, because you certainly won’t be.

As your firm grows, your technology should be able to grow with it and evolve as your needs and that of the industry change. Advisors should look for systems that can easily accommodate a larger number of clients and have a flexible architecture that can support future expansion and features.

  • 3. Automation = efficiency

Automation is the cornerstone of creating efficiencies and meeting increasingly rigorous compliance requirements. 

Advisors should look for technology that can automate repetitive tasks such as compliance checks, including the usually tedious OFAC testing, and account-opening processes. 

But the best RegTech solutions will also offer ways to use automation to increase client satisfaction. This can include setting up client communication workflows but also using the time they have now freed up to focus more on creating more meaningful client engagement.

  • 4. Data security for peace of mind

The average cost of a data breach in the financial industry is $6 million, according to an IBM Security report, so advisors must ensure that their technology helps to protect client data and their firm’s reputation. 

When looking at potential RegTech solutions, you will want to keep in mind that good data protection goes beyond cybersecurity and includes implementing strong encryption, regular backups, and regularly testing for vulnerabilities, as well as compliance with the ever-changing SEC regulations for data storage.

  • 5. Make it easy on users

Any technology solution is useless unless you can get buy-in from your team, and tech is often seen as a challenge for advisors. According to Cerulli, 75% of advisors changing firms said that learning new technology was their top anticipated challenge. Other research from Cerulli shows that 40% of advisor-managed assets are managed by “medium” technology users, meaning that they don’t use technology extensively. 

How can you get your advisors more comfortable with RegTech? Look for a solution that is easy to navigate, understand, and use. Systems with a user-friendly interface especially can make a big difference in the adoption and effective use of technology and, in turn, your ROI on implementing that solution.

  • 6. Integrate it all together

While your RegTech will be the hub of your operations, you will still have other systems you need to use on a regular basis. Consider technology that can be integrated with existing systems — such as custodians, e-signature captures, CRMs, trading platforms, financial planning tools, and more — and can create automatic workflows to the exchange of data rather than being a standalone solution. 

A fully integrated tech stack will make the transition easier and faster.

  • 7. Cost vs. customization

The cost of each tech solution is a balancing act. Some firms have gone the route of building a custom solution but that can quickly get pricey, especially when you consider having an in-house team to build and maintain it. 

However, you don’t have to compromise on customization, functionality, and security to save money. There are industry-specific turnkey and configurable solutions out there that offer everything you need at a price that works for a range of firm sizes.

  • 8. Choose an experienced provider

The financial services industry is a unique beast. Advisors should consider the experience and expertise of the technology provider and make sure they have a track record of successfully implementing solutions in the financial services industry. You don’t necessarily want to be the guinea pig trying things out. 

Remember, you’re trying to get your team’s buy-in, and one failed implementation could torpedo their confidence and patience for learning another new system quickly.

  • 9. Full digital accessibility for all users

Firms need to provide the best digital experience for advisors and clients. To support that goal, your RegTech should be a cloud-based solution accessible from any location. 

After all, if you’re eliminating the need for clients to fill out paper forms and advisors to download/upload forms ad nauseam, then no one should have to be tied to an internal network or specific workstation. Otherwise, advisors will look for another tech-forward, modern firm to work for — two-thirds of advisors think digitally innovative firms are more attractive, according to a Fidelity study — and your clients may take their investments elsewhere.

  • 10. What’s the mobile experience?

Along the same lines of advisors not needing to be tied to any one location to complete tasks, they also need the freedom to work on the go. 

RegTech that is mobile-friendly and easy to access and use from smartphones and tablets is not a feature at this point; it’s a must-have. This will allow advisors to stay productive and responsive while away from the office.

How Skience Can Help

Protecting your data is essential to your advisory business, so be sure to choose tech partners who value your data as much as you do. Skience offers a full slate of solutions to keep your data not only secure and compliant but also accurate, easily accessible, and dynamically capable of providing a 360-degree view of accounts and insights into your business. Schedule a demo with us today!