Preparing for Dodd-Frank and More Audits with Microsoft Dynamics CRM 2011

In response to heightened money laundering and fraud-related activities and the worst U.S. economic meltdown since the Great Depression, Congress passed the monumental Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in July. Designed to constrain excessive risk-taking activities, create more transparency for derivatives and exotic securities, enhance consumer and investor protections, and prevent big-bank bailouts, the regulatory overhaul of the Dodd-Frank Act will take years to accomplish. Many rules decreed by the Dodd-Frank Act will be expanded, composed, and enforced by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). The SEC and CFTC however, still have not received their requested budget increases for vital ramp ups in staffing and technology; so, these new rules and regulations will take some time to completely finalize and enact. Though there is much uncertainty on the evolving regulation, financial firms still need to be alert and prepared for more frequent and complex audits, increased scrutiny of client trading activity and interactions, and tighter registration and reporting requirements. It is not a matter of if, but when for regulatory change. Failure to exhibit compliance could result in severe repercussions and reputational damage. In order to comply with and adapt more quickly to the upcoming provisions and amendments of the Dodd-Frank Act, financial institutions must shore up their record-keeping practices.

One way for financial firms to improve their record-keeping and be better positioned for the anticipated increase in audits and compliance demands is to invest in Microsoft Dynamics CRM 2011. All KYC/AML documentation, buy or sell solicitations and any other investor communications concerning the suitability of an investment can be tracked and stored in CRM 2011. Such documentation is often referenced during audit investigations, and it can serve as an invaluable rebuttal for investor broker disputes or securities fraud or malpractice lawsuits.

Plus, the new and improved Auditing Features in CRM 2011 automatically allow firms to enable historical audit trail logs to track system data changes made to entities by date, by user, by type of action performed, or by changed field.  To do so, just go to Settings – Administration – System Settings.

1 Sys Settings

If they so desire, firms can use the Customize Entity functionality to enable auditing and track changes for just a particular entity.  Changes made to the applicable entity can be viewed by clicking Audit History on the left hand side of the navigation pane as seen below.

6 Capture

2 Phone # Capture

Additionally, CRM 2011 can provide firms with a chronological audit summary report, which lists all of the changes to entity records across an organization.  To view the report, just go to Settings – Auditing – Audit Summary View.  From the master list, firms can then drill down for more specifics on the captured changes.

4 audit summary

5 drill down

Moreover, firms can additionally decide and control which fields they want to be included in the audit records for a particular entity. Along those lines, firms also can grant users different levels of field security permissions, based on their role in the organization, ranging from Create to Update to Read-Only access.

3 Field Capture

CRM 2011’s detailed audit log trails, robust reporting tools, and flexible query functionality make it much easier to quickly respond to client-focused requests from auditors, which can lead to shorter audit lengths, better audit scores, and less ongoing scrutiny. Nevertheless, it should be pointed out that these CRM 2011 Auditing Features are not intended to provide the answers to every question or request during a thorough regulatory compliance examination. After all, most auditors will need to dive into a firm’s official books and records and trading practices, and the requirements of enforcement agencies differ based on a firm’s size, organizational entity structure, domicile, and line of business.