5 min read
We spoke to our experts; here are nine best practices to implement a compliance system successfully
A compliance department's function is integral for safe business and legally mandated. As such, any legacy system change, even if necessary, is met with extreme caution and trepidation.
For one, there's an abundance of technology available in today's market, creating a dilemma for stakeholders and decision-makers in the financial industry. Selecting and implementing the most suitable solution amidst this tech revolution can be daunting.
Secondly, the quality of this execution – including the project management expertise and available internal resources – will ultimately define whether your new AML system succeeds or fails... And the stakes are high. However, a successful compliance software implementation is possible with careful planning and the right team.
To help guide you through your implementation from start to finish, here are nine best practices from our advisory executives and implementation support experts, Jonathan McIsaac and Joshua Gubitz:
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Develop a business requirements document
If your current system can’t monitor certain types of activity, it should be documented and outlined in your business requirements document (BRD). You also need to decide what the end goal of your new system is.
Doing the necessary groundwork and developing a well-thought-out BRD that incorporates your program’s current and future state before approaching a vendor will allow you to meet your business and regulatory requirements.
“Asking the right questions upfront will help you find a solution that fits your institution” - Jonathan McIsaac.
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Have a realistic timeline, and don’t underestimate the implementation process
Don’t underestimate the time and effort needed to develop and deploy implementation plans.
To avoid any potential issues, be well organized. Define clear expectations, requirements, timelines, and KPI metrics. Additionally, ensure ample time to select and implement a new system before your existing SLAs expire.
“Start your planning way in advance. People often don’t realize how long the process of deciding, selecting, implementing, tuning, and getting a new transaction monitoring system up and running is. This is a long process, and the earlier you start planning, the better off you will be” – Joshua Gubitz.
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Engage and align all teams involved
Good communication is at the heart of implementation best practices and will allow you to maximize the value of your investment.
You will create accountability and responsibility by engaging with stakeholders upfront and clearly communicating your established project parameters and expectations. Additionally, this will act as a safeguard and stop you from choosing a system that exceeds your available internal resources.
Pay close attention to your IT team, as they will be responsible for implementation and maintenance, and remember, if the system demands significant resources that you cannot dedicate to its implementation and maintenance, it may not be the right system for your organization.
Lastly, ensure continuous information sharing with end users and department managers to create awareness of the implementation progress.
“IT Support is such a critical component of a successful implementation” – Jonathan McIsaac.
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Get help!
Planning a software implementation is one of the most critical business decisions you will ever make as you drive innovation across the organization. Wouldn't it be nice to have someone on your side who can support and guide you through the process?
With an implementation support partner like AML RightSource, you get years of dedicated subject matter expertise, established vendor relationships, and in-depth technical knowledge – helping to bridge the gap between business goals and vendor requirements for a successful implementation.
Four tips for choosing an implementation support partner:
- Insist on industry experience
- Make sure your culture and business approaches align
- Check if they know the system/vendor
- Ask them about their methodology
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Don’t let the system lead you
Getting caught up in the detail right from the start of an implementation is easily done. But you must think about this from a high level first, then slowly work your way down to the system, scenario, threshold, and agnostic level.
Ask yourself: What are we trying to achieve? What are the main risks we are trying to address? What gaps are we trying to fill? Keep the big-picture, conceptual goals front of mind at the start of the implementation project.
“Don’t let the system lead you by the nose. The detailed work comes last” – Joshua Gubitz.
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Document everything for the regulators – don't let it be an afterthought!
Documentation must include appropriate risk assessments, coverage assessments, policies and procedures, desk manuals, issue management logs, and all other supporting pieces to make the system understandable to the regulator.
Being transparent with your documentation and having an action or remediation plan in place will enable you to get signoff from your regulators and auditors for your implementation.
“A suite of documentation needs to accompany systems and programs. From a regulator's perspective, if it isn’t documented, it didn’t happen and doesn’t exist. That’s what regulators look at; they can’t see and understand what you did unless a document tells them what you did” – Joshua Gubitz.
Tip: When you use an implementation support partner, they will have a host of templated documents readily available and regulator friendly.
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Manage your risk
A model governance framework should meet objectives and provide evidential documentation before you hit the go-live switch on your new system. It’s also vital for ongoing use and can help prepare for audits and exams later.
Be systematic about going through your products individually, going through standard risk typologies, and addressing them all as they relate to your products and risks. Make this line up with the system and scenarios you plan to implement.
Documentation must be clear and easy to read for non-technical stakeholders on the different functionalities you will leverage within the system.
Jonathan recommends the OCC’s Safety and Soundness Handbook for guidance on this. It outlines what’s expected and what should be included to manage, maintain, test, and govern the system.
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Plan and test your go-live
It's better to be over-prepared than under-prepared. Before a new system is deployed, ensure adequate testing of different scenarios or outcomes, and have a contingency plan in place should there be any bumps in the road.
If you want to take an even more controlled approach, you can do a parallel or phased implementation.
With a parallel implementation, the new system is rolled out alongside the current system until its fully deployed – ensuring the latter continues to function uninterrupted. This allows for a smooth transition with minimal disruption to existing business processes.
With a phased implementation, the new system is gradually rolled out in phases or to a targeted subset of initial users. This approach allows any issues to be identified and resolved without causing company-wide disruption.
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Empower your team with tailored training sessions
One of the main challenges with any new system is user adoption. If a user is unaware of the benefits or how the new system meets their needs, there can be a high level of resistance to this change and a pull towards familiarity.
To overcome this challenge, users will need in-depth training.
Training sessions are recommended to be personalized to each team or group of end users, showing how the software will solve their unique problems. You can use a combination of open houses, peer-to-peer learning, and self-led webinars.
Planning and executing your software implementation project alongside training will encourage widespread adoption and usage throughout your company.
Are you interested in learning more about implementation support?
We have three engaging podcasts that explore this topic in-depth. You can listen to them here:
Our advisory services have helped financial institutions across the globe for decades. If you want to find out more about how our experts can help you reach your goals, fill out our contact form, and we’ll start the conversation.