Process automation can go a long way towards easing the ever-growing regulatory burden for investment and fund managers, but fully solving the problem will take a whole new approach. Join Crosskey for a look at ‘First Principle’ thinking, and how it is bringing new agility to regulatory compliance.

Investment and fund managers have long been justifiably proud of the speed with which they can react to changing market conditions and seize new opportunities – and have often embraced new technologies to facilitate this process.

However, an ever more demanding regulatory burden is restricting this evolution, requiring that more and more of their valuable time is spent not on growth and exploring new markets, but simply on reporting to stay compliant with industry regulations.

Process automation can go a long way towards easing this burden, but to truly solve the problem requires some radical, fresh thinking.

You First?

‘First Principle’ thinking is a way of approaching a problem that simply discards conventional wisdom, thinking not ‘how can this existing solution be improved?’ but ‘what if we approached this problem without considering any solution that had gone before?’. It’s the kind of thinking that Elon Musk brought to Tesla and Steve Jobs brought to the iPhone. Not looking at how others had developed products, but thinking in an entirely fresh way.

“First Principle Thinking is a means to challenge assumptions and solve complex problems by breaking them down into their most basic elements and reassembling them from the ground up.”

The technology employed by those working in capital markets has traditionally been evolutionary, rather than revolutionary. CRM systems that have required intensive redevelopment to adjust to changing requirements – and which are therefore always one step behind the needs of their users.

When Crosskey acquired Model IT in 2019 it was because they recognized that the company had developed a solution that could evolve at the same speed as businesses required – moving users from reactive to proactive.

Complex should be simple

Crosskey’s Capital Markets Solution is built inside Microsoft Dynamics 365 and as such is familiar and easily integrated with all the other tools that managers use on a daily basis. 

Furthermore, the design of the system means that adding fields or other small, simple tasks are just that – simple. Other Capital Market Solutions have required lengthy, specialised development on the backend, resulting in operational bottlenecks and delays in reporting and business oversight.

It’s a ‘no-code’ environment that actively encourages experimentation and rapid application development, allowing businesses to move with an agility that would previously have been impossible.

It’s a platform that makes it not just possible but simple to create new reports in extremely short time-to-market, with easy testing and pre-built user interfaces.

Why does this matter so much now?

The financial services industry is facing an unprecedented upheaval on two main fronts. First, in the wake of many high profile fines and failures, transactional regulation and reporting requirements have multiplied at an intimidating rate – providing a regulatory headache for larger companies and an impossible barrier to entry for smaller ones.

In addition, increased focus on sustainability and responsible business practices has led to (among other pieces of legislation) the introduction of the EU taxonomy, which lays out a series of ESG auditing and reporting requirements not just for companies themselves, but for those who invest in them.

Agility and automation are not just now competitive advantages, but are fundamental to avoiding fines and maintaining business efficiency. 

That’s why having a CRM system that can evolve and adapt to new challenges is so business-critical. Crosskey’s Capital Markets Solution can meet all existing compliance and Mifid requirements while also generating ESG reports that meet the demands of the new EU taxonomy – all using the business’s existing data.

What does the future hold?

It’s a great example of what makes the solution so special. When it was first developed, the need for ESG reporting was not on anyone’s radar, and yet the platform has adapted to the industry’s changing requirements without any fuss. By developing a solution that has taken a fresh look at industry challenges – specifically the need for constant evolution and adaptability – Crosskey has created a platform that also futureproofs business – built not to solve one siloed issue, but designed to adapt to any.

It’s a matter of principle.