30% Faster Ad Review: Compliant Marketing for Fintech Tools

30% Faster Ad Review: Compliant Marketing for Fintech Tools

Executive Summary

Summit Capital, a wealth management firm focused on high-net-worth individuals, struggled with slow and cumbersome advertising review processes, particularly for new fintech tools. These delays hampered product launches and marketing campaigns, impacting revenue potential. By implementing an automated advertising review process using Patrina's compliance software and AI-powered analysis, Summit Capital reduced ad review time by 30%, accelerating their marketing efforts and improving time-to-market for new fintech tools. This streamlined process ensures compliance and allows Summit Capital to capitalize on emerging fintech opportunities more quickly and effectively.

The Challenge

Summit Capital, managing over $8 billion in assets for affluent clients, recognized the growing demand for fintech solutions to enhance client service and portfolio management. Their challenge arose from the need to rapidly market these innovative tools while adhering to stringent regulatory requirements. Before implementing an automated solution, Summit Capital's advertising review process was entirely manual and time-consuming. Each marketing piece, including website content, social media posts, email campaigns, and presentations, required a thorough review by a dedicated compliance officer.

This manual review process faced several critical bottlenecks. First, compliance officers spent an average of 4 hours reviewing a single marketing campaign, searching for potentially misleading statements, unsubstantiated claims, or omitted disclosures. Second, the lack of a centralized system resulted in inconsistencies and redundancies, with different reviewers sometimes applying different standards. Third, the specialized nature of fintech tools, often involving complex algorithms and data analytics, required compliance officers to possess a deep understanding of both financial regulations and emerging technologies. This limited the number of individuals qualified to conduct reviews and further slowed down the process.

The consequences of these delays were significant. For example, Summit Capital planned to launch a new AI-powered portfolio rebalancing tool in Q2 of 2023. However, the advertising review process took nearly 6 weeks, pushing the launch date back to late Q3. This delay resulted in an estimated $500,000 in lost revenue, as competitors were able to market similar tools more quickly. Furthermore, the slow turnaround time discouraged the marketing team from aggressively promoting new fintech features, hindering adoption rates and limiting the firm's ability to attract new clients. In the highly competitive wealth management landscape, this sluggishness represented a serious disadvantage.

Another challenge stemmed from constantly evolving regulations. SEC guidelines regarding the use of AI and alternative data in investment advice are continuously being updated. Keeping pace with these changes and translating them into concrete compliance checks for marketing materials proved to be a demanding task. A single instance of non-compliance could lead to substantial fines, reputational damage, and even legal action, making a robust and up-to-date compliance framework essential.

The Approach

To address these challenges, Summit Capital partnered with Golden Door Asset to streamline their advertising review process. The firm leveraged Patrina's compliance software, which features built-in AI-powered analysis and pre-programmed compliance checks specifically designed for fintech-related disclosures. The approach involved several key steps:

1. Needs Assessment: David Park, the lead advisor at Summit Capital, worked with Golden Door Asset to conduct a comprehensive needs assessment. This involved identifying the specific types of marketing materials that required review, the common compliance issues that arose, and the existing workflow inefficiencies.

2. Customized Compliance Rules: Based on the needs assessment, Golden Door Asset configured Patrina's software with customized compliance rules tailored to Summit Capital's specific fintech offerings and regulatory requirements. These rules covered a wide range of potential issues, including:

   • Accuracy of performance claims: Ensuring that all performance data was accurate, verifiable, and compliant with SEC guidelines.
   • Disclosure of risks: Requiring clear and prominent disclosure of all risks associated with the use of fintech tools, including the potential for algorithmic bias and data breaches.
   • Avoidance of misleading statements: Preventing the use of exaggerated or unsubstantiated claims about the benefits of fintech solutions.
   • Compliance with advertising regulations: Adhering to all relevant advertising regulations, including those related to testimonials, endorsements, and social media marketing.

3. Automated Workflow Implementation: The automated workflow was designed to seamlessly integrate with Summit Capital's existing marketing processes. When a new marketing piece was created, it was automatically uploaded to Patrina's platform. The software then scanned the content for potential compliance issues, using natural language processing (NLP) and machine learning (ML) algorithms to identify red flags.

4. Training and Education: Golden Door Asset provided comprehensive training to Summit Capital's marketing and compliance teams on how to use the new system. This included training on how to interpret the software's findings, how to address compliance issues, and how to maintain the system over time.

5. Ongoing Monitoring and Support: Golden Door Asset provided ongoing monitoring and support to ensure that the system remained effective and up-to-date. This included regular updates to the compliance rules, ongoing training for staff, and technical support as needed.

The strategic thinking behind this approach was to shift from a reactive, manual review process to a proactive, automated one. By automating many of the routine compliance checks, compliance officers could focus their attention on more complex and nuanced issues. This approach not only reduced review time but also improved the consistency and accuracy of the compliance process.

Technical Implementation

The technical implementation centered around deploying and customizing Patrina's compliance software. This involved several key integrations and configurations:

• API Integration with CRM: Patrina's API was integrated with Summit Capital's existing CRM system (Salesforce) to automatically upload new marketing materials for review. This integration streamlined the workflow and eliminated the need for manual uploading.
• Natural Language Processing (NLP) Engine: Patrina's NLP engine was used to analyze the text content of marketing materials, identifying potentially misleading statements, unsubstantiated claims, and omitted disclosures. The NLP engine was trained on a large corpus of financial regulations and enforcement actions, enabling it to accurately identify compliance risks. For example, the system could identify phrases like "guaranteed returns" or "risk-free investment," which are typically red flags.
• Machine Learning (ML) Algorithms: ML algorithms were used to detect patterns and anomalies in marketing materials that might indicate compliance issues. For example, the system could learn to identify subtle variations in language that could be interpreted as misleading or deceptive.
• Rule-Based Engine: A rule-based engine was used to enforce specific compliance rules and regulations. These rules were customized to reflect Summit Capital's specific fintech offerings and regulatory requirements. For example, a rule could be created to require that all performance data be presented in a standardized format and accompanied by a clear and prominent disclosure of risks.
• Workflow Automation: Patrina's workflow automation features were used to route marketing materials to the appropriate reviewers and to track the progress of the review process. This ensured that all marketing materials were reviewed in a timely and efficient manner. The system also generated audit trails, providing a complete record of all review activities.
• Data Security: Patrina's platform is SOC 2 Type II compliant, ensuring the security and confidentiality of Summit Capital's data. All data is encrypted both in transit and at rest.

The calculations involved in quantifying the reduction in review time were based on a comparison of the average review time before and after the implementation of the automated system. The average review time was calculated by tracking the time spent by compliance officers on each marketing piece. The ROI was calculated by estimating the revenue lost due to delays in launching new fintech products and features.

Results & ROI

The implementation of the automated advertising review process yielded significant improvements in efficiency and compliance.

• Reduced Ad Review Time: The average time required to review a marketing campaign decreased from 4 hours to 2.8 hours, representing a 30% reduction. This freed up compliance officers to focus on more strategic tasks, such as developing new compliance policies and providing training to staff.
• Accelerated Time-to-Market: The time required to launch new fintech products and features was significantly reduced. The firm launched 2 new fintech products in the 12 months after implementation, compared to only 1 in the 12 months prior.
• Increased Marketing Output: The marketing team was able to produce more marketing materials, resulting in a 15% increase in website traffic and a 10% increase in lead generation. This was due to the faster turnaround time for advertising reviews, which allowed the marketing team to be more agile and responsive to market opportunities.
• Reduced Compliance Risk: The automated system helped to reduce the risk of non-compliance by ensuring that all marketing materials were reviewed against a consistent set of compliance rules. There were zero instances of regulatory violations related to marketing materials in the 12 months after implementation, compared to 1 instance in the 12 months prior. This single prior incident had resulted in a $10,000 fine.
• Quantifiable ROI: The estimated ROI from the reduced ad review time and accelerated time-to-market was $350,000 in the first year. This figure was derived from the increased revenue generated by the new fintech products and features, as well as the cost savings associated with reduced compliance risk and increased marketing efficiency.

Key Takeaways

Here are three actionable insights for other advisors looking to streamline their advertising compliance processes:

1. Embrace Automation: Automate as many routine compliance checks as possible to free up compliance officers to focus on more complex and nuanced issues. AI-powered tools can significantly reduce review time and improve accuracy.
2. Customize Compliance Rules: Ensure that your compliance rules are tailored to your specific fintech offerings and regulatory requirements. Generic compliance checks may not be sufficient to address the unique risks associated with fintech.
3. Invest in Training and Education: Provide comprehensive training to your marketing and compliance teams on how to use the new system and how to stay up-to-date on the latest regulations. A well-trained team is essential for ensuring the effective implementation and maintenance of an automated compliance system.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors streamline compliance, enhance client communication, and improve investment performance. Visit our compliance tools to see how we can help your practice.