FinTech, Briefly Frozen by DOL Rule, Is Hot Again

The unsure nature of the Department of Labor Fiduciary Rule effectively perplexed many investment advisers in the months following the election of President Donald Trump, with many paralyzed by the murkiness regarding whether he would or wouldn’t scrap the rule.

After a brief delay, part of the rule went into effect on June 9, although the DOL announced an intention to continue its review in a move that could portend additional future changes.

With a glimpse of improved clarity however, has come action. According to InvestmentNews.com, even the partial implementation of the rule has caused a skyrocketing in demand for technological answers to meet the fiduciary rule requirements.

One firm that offers FinTech solutions characterized the burst of activity as “a tidal wave of interest.” Another has seen a 40% increase.

The numbers show that firms are embracing technology-based solutions to their compliance challenges. This mirrors the trends with the regulators, as well; the SEC has spent heavily in big data technologies over the last several years, and within the last month, its Acting Director and Acting Chief Economist of the Division of Economic and Risk Analysis Scott W. Bauguess noted that improved artificial intelligence technology has bolstered the SEC’s capabilities of spotting potential wrongdoing.

In its 2018 budget request, the SEC’s No. 1 bullet is to “us[e] leading technologies to support our economic and risk analysis functions and permit the SEC to better keep pace with the entities and markets we regulate.” The takeaway is clear: neither regulators nor compliance officers can expect to effectively detect 21st century fraud with 20th century technologies.

Ascendant emphasizes to clients the importance of embracing technology in their compliance programs. We recommend you review your roadmap for the next two years and ensure your executive team is aware of the importance of investing now in an efficient and tech-enabled compliance program, for DOL and beyond.

For compliance with the DOL Fiduciary Rule, Ascendant’s proprietary tool, ACM, offers policy and checklist templates, along with a framework to distribute training materials to your entire staff. Ascendant’s ACM Trade Blotter Manager also offers an opportunity to move compliance officers at investment firms out of a manual, Excel-based testing model into a robust post-trade compliance engine and data analytics platform that detects, prioritizes and mitigates operational and compliance risks derived from trading activities.

For more information on how we can help you automate your compliance program, contact us.


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CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

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