John Schobel and Blane Warrene of RegEd stopped by recently to discuss their new Score for Compliance platform.
The platform is in beta with a mix of 12 broker-dealers and advisory firms and will be available in December.
It is of interest for a variety of reasons, not the least of which is that RegEd Inc. already claims to serve more than 1 million users with its compliance-related training and products. It has been around since 1994, a long time in Internet years.
Timing being an interesting thing, it so happens that RegEd's competitor Smarsh Inc. — competitor at least in some respects, including the electronic-content-archiving space — just came out with the results of its third annual survey of compliance professionals.
The firm surveyed 284 compliance folks, and in a nutshell, that group continues to have the same major concerns as last year. Those include new and changing regulations (67%), new communications channels (64%) and increased scrutiny and enforcement by regulators (63%). A question added this year asked about the need to balance employee privacy considerations with oversight requirements.
And much as Smarsh touts its own offerings as a means of addressing most of the above concerns, so, too, would the new platform from RegEd.
Mr. Schobel is chief executive of RegEd, while Mr. Warrene is a senior vice president who came aboard last year following the firm's acquisition of the popular Arkovi social-media-archiving application and service that he co-founded a few years ago.
GOING AFTER IBDs
RegEd is taking an interesting and somewhat different route to ubiquity than some other competitors, such as Hearsay Social Inc. and Socialware Inc. Those firms specifically pursued enterprises as customers from the start.
RegEd is pursuing those players, of course, but has gotten a lot of traction in the independent-broker-dealer community with its other training and advertising products. And it stands to reason that, due to its popularity with the same crowd, Arkovi will help the firm land additional customers with its new combined offering.
The Score portion of the platform brings together multiple compliance modules that RegEd already possesses, along with one as-yet-unseen piece: the Risk Analytics Suite.
Among the other modules are social-media archiving and surveillance, which is powered by Arkovi; the social-media content and adviser websites module, and the advertising review module.
When all is complete, the Risk Analytics Suite is supposed to power up all sorts of new abilities, one of which would allow a firm to do more than merely measure risk by serving as a firmwide analysis tool for all the content and the metrics associated with it. Those abilities, should they prove effective, are sure to be leveraged to the hilt by both broker-dealer compliance and marketing officers, and those fulfilling similar functions at sizable registered investment advisers.
“It is one thing for a compliance officer to monitor and track the content produced by 25 people, but it is something else altogether for someone to do the same with a workforce of 2,500,” Mr. Schobel said.
And while the firm may be going after broker-dealers rather than huge enterprises, it is building the platform's architecture to support any size customer. Its data warehouse and databases are being built from scalable components from Greenplum, a subsidiary of EMC Corp.
The idea for the platform originated from a think tank initiative launched two years ago by RegEd that included 20 broker-dealer chief compliance officers. And the thinking that came out of that led the firm to acquire Arkovi, which had already won thousands of financial adviser clients and had a reputation for its ease of use.
“The way we built the technology led us to grow pretty quickly,” Mr. Warrene said.
“We saw and see ourselves as in the business of removing obstacles,” he said, referring to the methodology employed by Arkovi, and now RegEd, with its archiving and content control systems.
SET IT AND FORGET IT
Broker-dealers and advisory firms can tell their advisers to direct all their electronic traffic to RegEd and pretty much set it and forget it.
Compliance officers will be able to access the dashboards and controls associated with the overall Score platform — when it is complete — from a single sign-on portal.
“Score will help firms measure and track what we are calling rep-centric risk — risk around the advisers and their social-media usage but also taking it and mashing it up with trade, [Financial Industry Regulatory Authority Inc.] background investigation data, FICO score, etc.,” Mr. Schobel said.
The combined analytics will add up to a proprietary benchmark — a “rep score” or “branch score” that broker-dealers will be able to customize to a certain extent for their own uses, he said.
Broker-dealers with only a module or two from the entire package will be able to “see” other aspects of the platform and be able to envision additional features, thanks to what I will describe as a “grayed-out” effect. Think of this in the way you would the free versions of some types of online services or software, on which you can see that additional premium features are available if you upgrade.
Complete pricing hasn't been set yet, but I will revisit this down the road and be better able to compare the complete product with others, such as Actiance Inc.'s Socialite platform, Hearsay Social, Smarsh and Socialware.
