New research commissioned by software company Red Marker has highlighted the continuing tensions between the legal/compliance and marketing teams in the asset management industry, in no small part made worse by archaic approval processes for marketing materials which are simply not fit for purpose in today’s complex environment.
Eight out of 10 (82 per cent) senior legal, compliance and marketing professionals across the asset management and investment sector in the UK, US and Australia admit that they see their relationship with each other as adversarial and ‘us and them’.
In fact, marketers in the sector see the compliance approval process as their biggest challenge (42 per cent agree), even more than reaching the right audience with their content.
Within the compliance review process the relationship with the legal/compliance team is seen as the second biggest challenge (chosen by 29 per cent), just behind concern over the lack of rules for new(er) marketing channels like social media (30 per cent).
Three-quarters of marketers (76 per cent) even think legal and/or compliance is in the way of them getting their job done, with 77 per cent believing the review process is too long, with too many steps.
The study surveyed 330 senior legal, compliance and marketing specialists across the UK, US and Australia, working in asset/fund management organisations with 5,000+ employees.
It also found that compliance and legal professionals in asset management are equally unimpressed with their colleagues in marketing: eight out of 10 (80 per cent) think marketing doesn’t understand why they have to abide by complex compliance rules, while even more (88 per cent) think marketing just wants someone else to take the blame when their content is challenged externally.
Nine out of 10 (88 per cent) have often heard their marketing colleagues say that the compliance rules are ‘over the top’, and the same number (88 per cent) say it would be much easier to get reviews done if they did not have to check the basics repeatedly.
Mark Wood, COO at Red Marker comments: “The tension between marketing and legal/compliance in this sector illustrates that the delicate balance between creativity and compliance can easily become adversarial.
“Providing a successful wealth management service – and standing out from competitors – relies on swift, effective and compliant marketing. These teams need to find better ways of working together to ensure content is produced and approved efficiently – but also in a way that reduces risk.
“The marketing compliance process has traditionally been under-analysed and there has been a lack of optimisation, with a certain ‘we have a process’ complacency. Many organisations have built quick-fix solutions or outsourced this process, but new technology means there’s no longer an excuse for inefficiency and apathy.
“With organisations identified as having misled customers receiving publicised penalties, there’s nothing more important than ensuring the marketing compliance process is watertight. That starts at the most basic level with robust communication and openness between teams.”
Eight out of 10 of those surveyed (80 per cent) agreed that the ideal review process would have the minimum amount of human subjectivity, which is where technology can play an increased role.
One such area is artificial intelligence (AI). Marketing, legal and compliance specialists (95 per cent agree) think that an AI-based tool that can intelligently scan and highlight marketing content for compliance and brand risks would support a more effective review process within their organisation.
The main benefits that asset management teams would most like to see from AI is automated checking of standard content like disclaimers, sources and T&Cs (35 per cent agree).
Their main concerns (31 per cent agree for both) are how to ensure an AI tool is set up correctly – and identifying what happens and who would be accountable if the tool missed a risk.
In addition, 82 per cent of those surveyed agree that productive conversations about how to make things happen are needed.
Wood adds: “One of the key barriers between these teams is the stereotypes: marketers seeing legal and compliance as being deliberately hindering, versus legal/compliance teams seeing marketers as too ‘gung-ho’.
“Auditors would expect to see a three line of defence (3LoD) model in place for day-to-day risk management, including management of compliance risk, but how cohesive is the 3LoD model with all this conflict?
“Giving marketing teams the training and tools to consider compliance issues early and often could pave the way towards a more symbiotic partnership.
“However, cooperation is paramount and both sides agree that they need to work together more efficiently to improve the business and help it meet its overall goals. That means having constructive conversations – and it could also mean using AI-driven technology to enhance processes by focusing on automation and standardisation.”
