8December 2022OPINIONIN MYBy Andreas Uremovic, Global Head of Investment Portfolio Compliance, Allianz Global InvestorsUSING PROCESS AUTOMATION TO TRANSFORM INVESTMENT PORTFOLIO COMPLIANCEOne of the key success factors for implementing this technology lies in the close collaboration between the business and technology sides at all levels ­ from sponsors to process owners to developersPortfolio managers are required to manage investment portfolios according to the investment guidelines ­the general term for the set of applicable regulations and contractual agreements signed with the client. Investment portfolio compliance teams also play a vital in helping the asset manager follow these guidelines, but these teams frequently spend much of their time on administrative tasks to fulfil regulatory and contractual obligations. Fortunately, new technology solutions can be applied to these administrative tasks, giving these compliance teams the bandwidth to add value in other critical areas.To be sure, following the investment guidelines is a key part of the portfolio management process, since not adhering to them could expose an asset manager to both reputational risks and financial losses. Apart from that, regulators have ­ since the global financial crisis ­ put a great deal of emphasis and attention on enhanced compliance requirements. This is where an investment portfolio compliance team comes in ­ the group that is responsible for advising, coding and monitoring the portfolio manager's adherence to the investment guidelines. Investment guideline monitoring helps manage and mitigate key risks or breaches, and as such it is one of the most critical steps that compliance teams perform.Considering the complexity of an organization's data management, trade processing, technology and regulatory control, it becomes difficult to eliminate the risk of a breach. But it is possible to take steps to prevent a breach in the first place ­ and in this case, an ounce of prevention is worth a pound of cure. The effectiveness of compliance officers rests in their ability to add value ­ such as by supporting the prevention of breaches ­ rather than being overly pre-occupied on the routine resolving, managing and documenting of breaches after they already occurred.One of the solutions for this is to free up the compliance team by automating administrative post-breach activities
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