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By Mark Mashewske, Principal Product Manager, RegEd |
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About the Author: Mark is a principal product manager for RegEd’s Advertising Review solution. He is project leader with a wide knowledge of enterprise software and a history of successfully initiating, transforming, and executing revenue generating projects. Mark has over 20 years of experience delivering industry-leading, user-focused software solutions with skills ranging from design and user driven development to releasing new products to market and forging strategic partnerships in the industry.
Buzzy new technology can deliver powerful capabilities to compliance teams tasked with reviewing sales materials. But technology can’t do it alone.
Introduction
The financial services industry has long been heavily regulated, with compliance departments working tirelessly to ensure that firms adhere to ever-evolving rules and regulations. One area of particular concern is the review of advertising materials, as these must be carefully scrutinized to ensure that they are compliant with regulatory guidelines. In recent years, advanced technologies such as artificial intelligence (AI) have emerged as powerful tools to streamline the compliance review process while minimizing risk. In this blog post, we’ll explore how AI and other advanced technologies can help financial services firms revolutionize their compliance review efforts – in particular we’ll focus on Lexicon Detection and Smart Disclosure Management.
Lexicon Detection: Automatically Identifying Risky Words and Phrases
Financial services firms are required to ensure that their advertising materials do not contain any misleading or inappropriate language. With the vast amount of content produced, it can be challenging for compliance teams to review each document thoroughly. This is where AI-powered lexicon detection comes into play. By utilizing natural language processing (NLP) techniques, AI algorithms can automatically scan advertising materials for risky words and phrases that may violate regulatory guidelines.
Lexicon detection offers several benefits:
- Improved Efficiency: AI can analyze vast amounts of text in a fraction of the time it would take a human reviewer, freeing up compliance teams to focus on higher-value tasks.
- Greater Consistency: AI-powered lexicon detection ensures a consistent approach to reviewing advertising materials, reducing the risk of human error.
- Adaptability: AI algorithms can be trained to recognize new risky words and phrases as regulations evolve, ensuring that your compliance process remains up-to-date.
Smart Disclosure Management: Identifying Missing or Incorrect Disclosure Statements
Another challenge faced by compliance teams is ensuring that advertising materials contain the necessary disclosure statements. Failure to include accurate and complete disclosures can lead to regulatory penalties and damage to a firm’s reputation. Advanced technology driven by the firm’s business rules can help to address this issue through the use of “smart disclosures.”
Smart disclosure management involves scanning advertising materials for missing or incorrect disclosure statements. By leveraging advanced technology and business rules, algorithms can identify when a disclosure is missing or does not meet regulatory requirements. This enables compliance teams to take corrective action swiftly, ensuring that advertising materials are compliant.
Some key benefits of smart disclosures include:
- Enhanced Accuracy: Technology can quickly identify missing or incorrect disclosures with high precision, reducing the risk of overlooking important information.
- Streamlined Process: By automating the identification of disclosure issues, compliance teams can focus on resolving problems rather than spending valuable time searching for them.
- Continuous Improvement: As your firm’s business rules are refined, they become better fit to detecting disclosure issues, ensuring that your compliance process improves over time.
The Role of Human Expertise: Partnering with AI to Reach New Heights
While the benefits of AI and advanced technologies in streamlining compliance review processes are significant, it is crucial to emphasize the enduring importance of human expertise. The message here is not that technology will replace compliance professionals, but rather that it will empower them to be more efficient and focus on high-value contributions. AI models rely on confirmation and constant training by the firm’s experienced human reviewers who understand the history and nuances of the firm and the industry.
In this partnership, human expertise serves as a crucial complement to AI-driven technology. Compliance professionals can provide context and insights that AI may not be able to grasp fully. This collaboration enables the continuous improvement of AI algorithms, ensuring their accuracy and relevancy in an ever-changing regulatory landscape. Additionally, human reviewers can make judgment calls in complex situations where AI might struggle, leveraging their years of experience to navigate gray areas. Thus, the integration of AI technology in compliance processes not only enhances efficiency but also supports the valuable work of compliance professionals, allowing them to focus on the strategic aspects of their roles.
Conclusion
The power of AI and other advanced technologies to streamline compliance review of advertising materials in the financial services industry is undeniable. By leveraging AI-powered lexicon detection and other advanced compliance tech, financial services firms can revolutionize their review processes, resulting in greater efficiency, reduced risk, and improved adherence to regulatory guidelines. As the regulatory landscape continues to evolve, embracing AI and other advanced technologies will be crucial for firms looking to stay ahead of the curve and ensure ongoing compliance success.
How RegEd Can Help
RegEd’s Advertising Review solution has processed more than 5 million reviews, giving us experience with more data than anyone else in the industry by a large margin.
RegEd’s Enterprise Advertising Review is the most widely adopted solution among the nation’s broker-dealers due to its advanced capabilities. As the advertising review process is accelerated by technology-assisted review capabilities, reviewers spend less time reading and annotating content, ultimately providing the ability for certain submissions to be automatically reviewed and approved.
To learn more, schedule a consultation with a RegEd representative.