Rick Grashel, Co-Founder and Chief Technology Officer, Red Oak Compliance SolutionsRick Grashel, Co-Founder and Chief Technology Officer
Regulatory compliance presents financial organizations with a distinctive opportunity to prove their integrity, reliability, and ethics, which can enhance stakeholder trust and strengthen their competitive position. While compliance frameworks were developed as ideal practices to help organizations navigate the evolving financial landscape and protect their critical assets, companies often find themselves overwhelmed with regulatory requirements. From navigating obscurities surrounding regulatory laws to adhering to the constantly changing guidelines for avoiding hefty fines, financial firms need to be nimble and agile to survive in the regulatory jungle. Despite the multitude of companies offering compliance solutions, very few are truly equipped to deal with the myriad of challenges. Even fewer combine this experience and innovation as meticulously as Red Oak Compliance Solutions.

Established in 2010, Texas-based Red Oak has been recognized for providing the best-in-class compliance solutions for financial services firms across the globe. The company specializes in advertising and marketing review software for broker-dealers, asset managers, registered representatives, investment advisors, mutual fund companies, and insurance firms. Red Oak’s industry-leading compliance workf low platform minimizes risk, reduces costs, and increases efficiencies in the compliance review process. “What differentiates us is our customer-first mentality, deep subject matter expertise, and decades of experience building truly scalable enterprise software,” says Rick Grashel, Co-Founder and Chief Technology Officer at Red Oak Compliance Solutions.

The Beginning Chapters

Red Oak embarked on its journey as a small compliance consulting firm providing advertising review and broker-dealer registration services to financial companies. Based on their early interactions with clients and the market, Red Oak realized a need for a tool to orchestrate and manage the tasks and workflow for its consulting engagements. The off-the-shelf products Red Oak tried to leverage in their engagements proved to be outdated and cumbersome. Seeing this gap in the market, Red Oak decided to build a reliable compliance advertising review solution from the ground up to address their own consulting requirements, as well as help clients fulfill their advertising review and compliance workflow needs.

With a comprehensive suite of SEC 17(a)-4 compliant features, Red Oak’s solution is tailored to meet the evolving needs of financial firms, small and large. The company’s comprehensive software is purpose-built to manage the compliance review process from start to finish. In addition to ensuring their clients are compliant, Red Oak also helps them document and evidence advertising compliance procedures to regulatory bodies, such as the Financial Industry Regulatory Authority (FINRA) and the SEC. It also satisfies MiFID II and GDPR regulations. Red Oak solves the problem of inconsistencies in communication caused by multiple teams using different pieces of software to work with each other. From a compliance perspective, regardless of the content creation software used, everything boils down to the compliance team ensuring that marketing materials have the proper disclosures, don’t use overly promissory language, and don’t violate regulatory law regarding the distribution and consumption of advertising material. Red Oak’s solution facilitates these requirements with its advanced workflow engine that streamlines the interactions among different teams while ensuring that all interactions are codified for every approved asset.

Red Oak also provides additional modules to simplify the jobs of each team. The lexicon scanning module automatically identifies words and phrases that should not be mentioned in a specific context.
The disclosure module helps compliance and legal teams manage their entire disclosure library as well as scanning marketing material for the presence of needed disclosures using automated intelligence. Finally, with an integrated API, the solution seamlessly connects with different systems used by various departments and ensures frictionless interactions between them.

Building Agile Software the True Way

Red Oak prides itself on holding true to the four values published in the agile manifesto—individuals and interactions over processes and tools; working software over comprehensive documentation; customer collaboration over contract negotiation; and responding to change over following a plan. Showing utmost commitment to these values, the company constantly embraces its clients’ evolving needs and delivers meaningful software that meets those needs.

Red Oak’s leaders believe that real innovation stems from listening intently to client needs and addressing them better. The company gathers feedback from its customers to ensure that the solution is applicable and beneficial to the entire Red Oak user community. Customers benefit not only from the features in Red Oak’s software but also from other customers’ experiences using the software to satisfy similar needs. This has been highly beneficial when a customer is looking to brainstorm alternative solutions to a problem. When customers approach Red Oak with a specific requirement, the Red Oak team can provide suggestions for solving that problem based on experiences with other customers in the community who use Red Oak’s software to solve that same problem.

When customers have specific needs, Red Oak may ultimately deliver a targeted solution as an enhancement to its software. “We don’t do one-off features or custom coding. We believe that customers obtain the best outcomes when using the same software version and features,” Grashel noted. While a key differentiator of Red Oak Software is the configurability of features to resolve clients’ unique challenges, the software is also designed to be broadly adopted across its customer community.

What differentiates us is our customer-first mentality, deep subject matter expertise, and decades of experience building truly scalable enterprise software

Customized Solutions for All Compliance Needs

Red Oak’s strong portfolio of industry-leading clients is a testament to its prowess in the advertising review and RegTech space. The company’s capabilities were on full display when it recently engaged with one of the world’s top 10 asset management firms. The customer generated thousands of pieces of advertising material globally in numerous languages every month using multiple pieces of content creation software. As such, the client was struggling to adhere to SEC, FINRA, and local regulations concerning their advertising content. To ensure the advertising material met all compliance needs, they had to manually toggle between the Red Oak software and their content creation tools. Every time the customer had to make a change, they would have to switch between software, which made the process laborious and created a greater potential for errors. Red Oak worked with the customer to build an integration between its software and the different content creation tools they used.
It helped eliminate the manual processes by creating a seamless integration between systems and resulted in a 50 to 75 percent reduction in time spent on approvals.

This is one of many examples where Red Oak has been able to provide a solution that fits the bill. The company consistently follows a meticulous client engagement process to offer such compelling solutions continually. Red Oak begins an assessment by directly engaging with customers to understand the challenges at hand. The company then identifies the best-fit solution based on the latest technology trends. “Sometimes emerging technology trends offer a viable solution, but often, a mature, tried-and-true technology is the absolute best choice. And that’s how we ensure that our solutions balance relevance, stability, and innovation,” Grashel shared. The company’s agile business model combined with high-touch support fuels constant growth and allows updates to the software to meet the ever-changing needs of the customer community.

Red Oak believes that solutions built by vendors without interactions between customers and software development professionals will never meet the mark, leaving marketing teams scurrying for defensive messaging when a failure occurs. The company addresses this challenge by insisting that all employees interact with customers, thereby eliminating the barriers to communication between them.

Driving the Future of RegTech
Grashel’s sage advice to budding RegTech entrepreneurs is to ensure that end-users are directly involved in their software’s assessment and purchasing process. According to Grashel, systems integration is an unexplored space in the industry and is ripe for disruption if approached correctly.

Steering ahead, Red Oak is keen on assisting its clients in managing large fields of registered representatives and investment advisors while expanding further in the broker-dealer space. They remain committed to continuously improving and evolving their existing software solution while launching new modules to drive greater efficiency for compliance teams.
  • We aim to provide solutions that not only help companies stay compliant but also evidence how automation and machine learning work to a regulator

The company also continues to explore the sensible and expanded use of machine learning in the regulatory space. Many firms attempting to leverage machine learning for their compliance needs often fail to provide adequate details on their regulatory decisions when under audit. “We aim to provide solutions that not only help companies stay compliant but also evidence how automation and machine learning work to a regulator,” said Grashel. “At Red Oak, our mission has always been to help financial and insurance firms remain compliant and provide the tools and technologies they need to perform compliance review functions with improved efficiency, reduction of risk, and faster approval times. In this industry, the number of content creation systems are growing rapidly, the number of content distribution platforms are increasing, and the need for remote team collaboration is at a level the world has never seen before. We believe that Red Oak’s compliance platform is the best system to address these realities and take our customers into this future landscape using best-in-class integration points, configurability, scalability, and customer service.”