Financial Services Advice – Risk Reduction

Financial Services Advice – Risk Reduction

A financial services institution providing wealth advice faced a major challenge in monitoring client advice and recommendations in a scalable and cost-effective manner. Deployment of Frisk enabled real-time advice monitoring with proactive audit checking, improving the quality of advice and reducing client complaints and claims.

 

Problem Solution Benefits
Financial services organisations providing wealth advice face a major compliance and monitoring challenge. Audits are currently conducted by physically visiting each practice location and only cover a fraction of the advice provided by the planners. By creating a single unified index of all relevant advice documents and associated materials, Frisk enabled the compliance team to instantly analyse 100% of relevant documents and develop search criteria to identify Key Risk Indicators and flag areas of increased concern.
  • Reduced time to respond to ASIC queries.
  • Improved confidence in identifying compliance breaches before they become systemic.
  • Enables automated ‘pre-vet’ of all advice so advisers are confident they have met compliance requirements.

Problem

Since the Global Financial Crisis of 2007-2008, compliance has become one of the main focal points for financial services businesses in Australia. The Government and regulators expect the highest standard of advice, disclosure documentation and record-keeping.

In spite of such emphasis, compliance for the most part remains inconsistent, extremely manual and reactive. According to one report, only 3% of all advice in Australia is monitored, most often only once a year. For larger organisations, a considerable number of inconsistencies and ‘blind spots’ in data access challenges their ability to identify systemic issues and implement a solution that’s scalable. Hence, the cost of compliance is skyrocketing.

Solution

One of our clients aimed to achieve 100% advice-monitoring capabilities in a real-time, automated and cost-effective manner. Audit checking would occur before advice is provided to a client and the system would apply consistent and objective rules to identify issues, trends and systemic risks. Something like this could in fact drive behavioural change, improve the quality of advice, and even reduce the number of client complaints and claims.

Enter Frisk.

With its flexible connectors, Frisk indexes the various stores of unstructured data in file-shares and emails, along with structured database information, to increase the existing data reach significantly. This data becomes completely searchable and is updated regularly to capture new information. Authorised staff within the organisation are now empowered to search for information within Statements of Advice, application forms, scanned PDF documents attached to emails and file notes saved within the financial planning software. Staff can locate information at sub-second speeds, rather than wasting hours as they were previously. For major banking institutions with over a thousand advisers, Frisk’s ‘federated search’ capabilities enable a single view of all data across the country and creates a global search functionality across the enterprise—all, with sub-second results.

This federated index is also enriched with insights derived by analytics, along with any reference data the organisation may stipulate (e.g. APL or adviser accreditation information). Frisk then assists with the creation of data models (or search criteria) for all the attributes of interest. Once the data is enriched and indexed, it can be navigated to explore the interconnections within it. On top of this, Frisk applies analytical models to test for specific items—usually compliance related questions. When Frisk identifies a potential issue, all the relevant information is communicated into the case management system for investigation as needed. This provides an evidentiary framework to the investigation.