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Advocating for Technology in the 2023 Budget Process

Are you prepared to get the resources you need for the upcoming year?
Tuesday, August 11, 2020

The past year has included a fair amount of economic uncertainty, impacting businesses trying to plan for the future and properly equip their teams.

We’ve talked to teams who wonder whether they have the resources and capacity to change their processes and how they’ll handle it if their staffing headcount gets cut or if they lose a team member.

Instead of trying to predict the future, teams can take greater control over the future and their resources by advocating for technology during the upcoming budget cycle. By building a superior regtech stack into your company’s budget, you can decrease the potential for disruption and increase your potential for successful risk mitigation and resource management.

Why Is Compliance Technology A Must During This Budget Cycle?

Technology is now table stakes in the compliance industry. Why?

Compliance is a document-heavy, data-heavy business function. To maintain a high-quality, compliant compliance program in the ideal circumstances means processing plenty of paperwork and filing redundant data.

In an environment where teams are experiencing an increase in virtual processes, some operations may inevitably fall by the wayside simply because of the overwhelming nature of what each business professional is being asked to do.

Compliance can also become an out-of-sight, out-of-mind process for many other business units. If their compliance leaders aren’t checking in regularly, it can be easy to forget to keep compliance in the loop.

That means possibly missing out on some items/processes. It’s impossible to maintain oversight on every team in your company. With everyone being asked to take on more responsibility, it is challenging to communicate effectively, leaving little time for more critical compliance processes and reviews.

The purchase and implementation of a compliance technology solution provides everyone with a consistent baseline regarding expectations. Instead of wondering whether compliance should be included in a process, incorporating technology, workflows, and support can get everyone on the same page and invest in making their life simpler and reducing the firm’s regulatory risk.

How Does The Evolution Of The Compliance Professional Factor Into The Budget Planning Equation?

We’re all guilty of thinking this – we don’t necessarily trust technology that might lighten our workload.

After all, if technology reduces the need for humans in the compliance review process, aren’t we just budgeting ourselves out of a job?

Not exactly.

If you’re strategic, you recognize that your organization needs a compliance professional at the table during discussions about everything from product design/development to market expansion to budget allocations. In our fast-paced business landscape, compliance professionals must be included in strategic processes and provide continuous monitoring of regulatory guidance applications.

Compliance isn’t a one-and-done or check-the-box discipline. To do it well, you need to be actively involved, not sit on the sidelines, and wait for another department to assign you to work or request a final sign-off blessing.

If you’re continually at your desk, personally and laboriously reviewing every piece of compliance material, every advertising document, etc., that comes across your desk, you won’t be able to be present and provide strategic guidance to your colleagues.

As compliance procedures continue to become more complex and with regulations from multiple governmental entities sometimes at odds with one another, compliance professionals must also dedicate themselves to continuous learning, reading/reviewing, and higher-level analysis.

Employing automation technology in some compliance processes (like advertising compliance review, for example) reduces time spent on repetitive tasks and boosts your focus and commitment to managing critical activities that benefit your organization and mitigate regulatory risk.

I Know My Budget is Being Reduced this Year. How Can I Make Compliance Technology A Must-Buy For My Organization?

To secure the technology you need, you must convince others in your organization that the solution you’re proposing brings a significant return on investment to your organization. You also must recognize and broadcast that ROI comes in multiple forms.

Consider the opportunity cost.

If it seems difficult to ask for more money or to entertain new purchases during this budget cycle, remember that the actual line item on the budget isn’t the only cost you should consider.

Compliance fines continue to grow as regulators crack down on even well-meaning companies. That means massive penalties like the $50 million levied against Equitable Financial for their misleading statements on investor fees and more minor but still onerous fines like Arlington Capital Management received for misleading advertising ($125,000 in civil penalties).

Having weak or gaps in compliance oversight is a frequent citation during SEC reviews. Having technology in place to support your compliance efforts has become a necessity. Not having a resource available for your team can be a red flag to regulators seeking to ensure you’re adequately supporting your organization’s compliance efforts.

Time saved can be another measure of opportunity cost. If your team members are all working remotely, how are they handling processes that were once manual?

When preparing for an audit, will you find that all your compliance documentation is spread across an extensive network of team members’ computers and workspaces? How much time will it require to get that paperwork in place, and what’s the per-hour cost compared to making a technology purchase to streamline those processes?

Get business units invested in your vision.

When you advocate for yourself in a budget meeting, it can be frustrating to try to wring out the dollars and cents you need, especially if your organization’s concerned about the impact of the economic decline on your next year’s revenue.

Need a better strategy for getting your technology line items approved? Consider partnering up with another business unit that stands to gain value or time savings from the implementation of new software.

For example, if you’re looking into advertising compliance technology, go straight to the source of your organization’s advertisements – the marketing team. Outline the benefits they’ll receive from the technology purchase (resource savings, faster time-to-market, less back-and-forth), then present it as a unified request.

You’ll gain several benefits with this approach:

    • You’ll present yourself as a strategic thinker, looking for ways to collaborate between teams. This can lead to further and earlier inclusion in discussions, positioning compliance as a vital part of the decision-making process rather than an afterthought or a last-check-before-going-live.
    • You’ll have a better chance of approval if you have two teams looking for a solution instead of positioning it as one team making a technology request solely for their benefit.
    • You can split costs between interested departments, decreasing your overall budget investment.

Advocating for compliance technology means you’re wisely considering the resources that will keep your organization out of trouble, in compliance, and functioning at a high level.

The time to make your decisions and pitch for the funds you need is now. Secure and implement new tools while you have the budget bandwidth available and before you start getting pressed for time or resources. Then, if changes occur, you’ll be better prepared and equipped to put the benefits of compliance automation technology to use on behalf of your firm.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.

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