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Regulation and Compliance > State Regulation

Docupace Leads Effort to Increase Industry STP

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Alan Giancaterino is always ready with a metaphor.

“When you’re building technology for the purposes of processing, you’re really building a pitching machine,” the executive vice president of sales and marketing with Docupace Technologies told ThinkAdvisor at the TechLeaders 2015 conference in Dallas on Friday. “But you have to have a catcher on the other end.”

And that, he said, is a major reason for the slow (sometimes frustratingly so) adoption of straight-through processing in the financial services space.

“So many people treat the symptoms, not the wound,” he added. “You can’t just sign up for e-signature. It has to be part of an overall STP initiative, or the adoption will be low.”

Another obstacle, he noted, was the lack of uniformity in state regulations.

“Docupace is driving innovation and change in the space; we’ve taken on that role. We recently hosted a conference call with the attorney generals of 38 states on the subject of straight-through processing. They were extremely thankful for the education. Everyone is familiar with it on the consumer side, but there still lags a coordinated effort by the industry at the state level, where much of this is governed. Look at the insurance industry which is prime for STP; it’s regulated by the states.”

Giancaterino argued that the industry is sick and broken, but doesn’t know it because it’s still making money.

“Try to sell a compliance solution to someone who’s never been fined and see how far you get,” he explained. “Now try to sell one the day after a sanction has been levied. You’ll notice a difference. As we always say, the situation is the boss, and right now the situation isn’t bad enough for STP, or at least that’s the perception.”

Once the industry realizes it’s as much about driving compliance and ensuring suitability as it is about efficiencies and cost savings, then the industry will embrace it, he added.

“Most medicine is after-the-fact, like post-trade surveillance that occurred soon after computer technology was introduced. Today, it has to be about KYC — or ‘know-your-client.’ Suitability is where it all begins, which is at the point of sale. That’s how you drive compliance. You can’t have a compliance officer with you at every sale, so technology is the next best thing.”

Which brought him back to including individual components in a larger STP initiative. He noted the firm recently brought Kevin Laraia, COO of Cetera Financial Group, aboard to grow Docupace’s STP Network initiative, a consortium of companies dedicated to increasing STP adoption both within and outside their respective organizations. 

“This something that resonates with us. Things like e-signature are part of a larger puzzle, it can’t stand on its own. When you make it part of STP, suddenly it makes sense,” Giancaterino emphasized, before coyly mentioning that “Regulators aren’t thinking about it in this way, but once we explain it to them, they do. We’ve been tapped by various regulators and government agencies relative to cybersecurity issues. I really can’t say too much, but they wanted our thought-leadership.”

Founded in 2002 and based in Los Angeles, Docupace is a provider of secure, regulator-compliant paperless document management and processing for the financial services industry. RCS Capital Corp., the company founded by controversial investor Nicholas Schorsch, recently acquired a majority stake in Docupace.


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