Cicada Positions Profiler to Help with MiFID Obligations

As the first UK clients prepare to go live on Profiler, Cicada’s client data solution originally designed to help financial institutions comply with anti-money laundering (AML)/know your customer (KYC) regulations, the vendor is positioning the system as a solution for MiFID compliance. “Part of MiFID is certainly price transparency, but another part of it is client reclassification and client data management,” says Cicada’s executive vice president Hubert Holmes. “Profiler is well suited to this because these issues are so similar to the issues created by AML/KYC.”

According to Cicada, in a MiFID environment, Profiler would provide automation for generating client classifications, helping firms reduce manual effort in reviewing (and reclassifying where necessary) their entire client base. Profiler’s document attachment and checklist functionality helps a firm “re-paper” clients who may need additional or amended documentation or business agreements. Profiler’s workflow framework provides for centralization, control and collaboration between departments, and the software’s rules can be configured to help automate suitability assessments and appropriateness tests for compliance with the directive.
Profiler is already up and running at several large broker/dealers in the US, Holmes says, with the first UK clients set to come on board this month. So far, all the users are deploying the system in the context of KYC/AML requirements, unsurprisingly, since “that really is a giant driver now – the fines and sanctions are already happening”, he explains. But he is confident firms will start spending on technology for MiFID in a big way in the latter part of this year and the early part of next. “There is more to it than just compliance,” Holmes says. “The regulatory imperative will force firms to look at this, but as they take a look they will see other benefits in having a standardized way to deal with client data and to manage it. There is a business benefit in having tighter risk weighting, in better understanding your clients and in having all that client data at your fingertips instead of dispersed throughout the organization.” A client that had already deployed Profiler for KYC/AML could use the same product set for MiFID, and simply kick off a separate workflow, he adds.