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Fidelity Launches RegTech Business

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What You Need to Know

  • Saifr is a new offering from Fidelity that uses artificial intelligence to reduce regulatory risk.
  • It should be of most interest to large firms with a heavy volume of public-facing communications, T3's Joel Bruckenstein says.
  • The new tech highlights the value that Fidelity Labs brings to RIA and broker-dealer clients of Fidelity, he added.

Fidelity Investments has launched Saifr, a regulatory technology business powered by artificial intelligence that it said Monday was developed in Fidelity Labs and provides human augmentation tools to help financial institutions create, review and approve compliant public communications to mitigate brand, reputational and regulatory risk.

Saifr is a “creative [use] of technology which can help automate a very manually driven task,” according to Joel Bruckenstein, head of Technology Tools for Today and a certified financial planner. “It should be of most interest to large firms that have a heavy volume of public facing communications to deal with,” he told ThinkAdvisor by email.

“This development once again highlights the value that Fidelity Labs brings to RIA and broker dealer clients of Fidelity,” he added.

Agreeing, Tommy Marshall, executive director of Georgia Fintech Academy, told ThinkAdvisor: “This announcement and solution from the Fidelity Labs is exciting. The ability of marketing communications teams at wealth managers, brokerages, RIAs, and banks to effectively send timely and relevant communications to clients has been limited.”

One “big limitation has been the time necessary to wait on human review of all communications by compliance personnel,” according to Marshall. But “these reviews are important and necessary to limit legal and compliance risk,” he said, adding Saifr “will speed up the review cycles significantly by helping the compliance reviewer to focus in on only those areas that require human interpretation.” He called it a “big win” for wealth providers and clients.

“We think this will be a great addition for Fidelity clients,” Doug Fritz, F2 Strategy CEO and founder, told ThinkAdvisor. “We’d love to see them expand this technology farther and look for performance outliers, risk concentrations and other areas where AI would help smaller firms if they had access to the larger-firm budgets!”

Saifr’s Solutions

Saifr’s solutions use a set of natural language processing models trained on tens of millions of data records from Fidelity and third-party firms to help marketers and compliance teams collaborate to create compliant communications faster, according to Fidelity.

Saifr’s SaifrReview and SaifrScan products provide a “human-machine dynamic, enabling computers to do the monotonous tasks of compliance review, allowing marketers and compliance teams to focus on the creative and complex details of compliance review,” Fidelity said.

Saifr’s products are powered by models that Fidelity said “capture the subtleties of language to uncover potential risks, flagging non-compliant language and images in both written content and videos before the first round of review by compliance professionals.”

Its AI engine “learns continuously through user-in-the-loop interaction, private and third-party public data, and regulatory updates,” according to the company.

SaifrReview, the primary platform, is an intuitive workflow tool that Fidelity said aids in content creation, including written materials, social media, audio and video assets. Its dashboard allows in-line collaboration between marketing content creators and compliance professionals, as well as approval management, tracking and assistance filing with regulators.

As part of the workflow, SaifrReview provides immediate risk scoring and disclosure detection during document creation, along with suggestions before final sign-off, Fidelity said.

Meanwhile, SaifrScan is an application programming interface (API)-as-a-service tool that the quickly analyzes and scores a firm’s communications and flags potential compliance issues in a detailed report, the company says.

Saifr is an example of how Fidelity is “leveraging its expertise to develop complex businesses, products, and tools in a highly regulated industry and bringing that expertise to market for the industry,” according to the company.

“Ensuring that marketing materials are compliant with various regulatory rules requires multiple touchpoints inside and outside an organization, including content creation, compliance feedback, revisions, e-mail, and workflow hand-offs,” according to Vall Herard, managing director of Saifr at Fidelity Labs.

“As a result, the process can be inefficient and create the opportunity for friction and risk,” Herard said in a statement, explaining: “By minimizing friction throughout this process, Saifr frees up time for content creators, marketers, copy editors, legal, and compliance specialists to focus on the value-added details.”

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