A look at how poor UX in compliance software drives adoption failures, missed certifications, and hidden labor costs at SEC and FINRA regulated firms.
The Word Nobody Planned to Say
Compliance officers don’t come into vendor conversations looking to vent. So, when the same word keeps coming up unprompted, across independent conversations, it’s worth paying attention.
Conversations with compliance leaders across financial services have surfaced a consistent pattern. CCOs, VPs of compliance, and operations professionals wearing multiple hats all describe their current compliance platforms in nearly identical terms:
“Clunky”
“Not intuitive”
“Frustrating”
“Hard to use”
Not just for the compliance team, but for the employees who have to interact with the system too.
None of these firms coordinated their feedback. They also differ widely in investment strategy, size, location, and registration status. And yet, the language is strikingly consistent.
That’s not a coincidence.
What “Clunky” Actually Means
The CCO of a mid-sized hedge fund – one person managing compliance alongside CFO and COO responsibilities for a roughly 15-person firm – put it plainly when asked about his current platform:
“It’s clunky, to say the least. It does the job, but it’s definitely not the most efficient application.”
The phrase “does the job” is carrying a lot of weight. It’s the language of tolerance, not satisfaction. It’s the compliance version of taking an hour-long detour every day because the bridge has been out for years. The route works… but at what cost?
The GC / CCO at a small but growing RIA had hoped that adding a calendar module to her existing employee oversight platform would bring more structure to her program. Instead, she found the experience more disorienting than before:
“It’s been a little clunky and doesn’t work quite the way my brain works.”
At a private equity firm, a compliance officer described what “clunky” looks when it comes to certifications:
“It’s not intuitive and it can be a little clunky, especially for our employees. We’ve had a lot of issues with certifications not copying over quarter to quarter correctly or things just being wrong once we set them to go out.”
The consequence was that she had spent multiple quarters logging in on the morning certifications launched to fix formatting errors before employees saw them. She noted:
People already don’t like compliance. So you definitely don’t want to have partners getting confused and asking questions because the system is flawed.
The Hidden Cost of “Good Enough”
Here’s what compliance leaders often don’t fully account for when they decide to stay with a tolerable system: the labor tax of a bad user experience is paid continuously, by everyone who touches the platform:
- It’s paid by the compliance officer cleaning up certification errors on Friday mornings before they hit employee inboxes.
- It’s paid by the CCO fielding calls and messages from employees who can’t figure out how to complete a pre-clearance request or submit an attestation.
- It’s paid by the solo compliance professional manually collecting paper brokerage statements because broker feeds keep breaking and the support team’s response time is measured in weeks, not hours.
- It’s paid by the administrator maintaining a parallel Excel tracker because the platform can’t produce a clean export.
A newly appointed CCO at a large alternative investment firm described inheriting exactly this situation. After stepping into the role at the start of the year, he found that certain broker connections had been breaking so frequently that his predecessor had stopped trying to fix them:
“Certain broker feeds break a lot, and we’ve just started telling people, rather than fixing them, to just get rid of the feed. I’ll just collect paper statements instead.”
That’s a compliance program that has been quietly degraded by a system that costs more to maintain than it saves.
The regulatory stakes of that degradation are real. The SEC’s own examination data shows that code of ethics compliance is one of the five most frequently cited deficiency categories across registered investment adviser examinations, alongside compliance policies and procedures, required regulatory filings, the Custody Rule, and books and records. These aren’t obscure corners of the regulatory framework. They’re the fundamentals. And they’re the exact areas where “clunky” software creates the most exposure.
When the Admin Problem Becomes an Employee Problem
Poor UX in compliance software has two victims: the compliance team and the employees they oversee.
This distinction matters: when employees find a compliance platform confusing or cumbersome, they become avoidant. They delay certifications, call the CCO for help, or make errors that generate exception reports. Every one of those outcomes is a direct cost.
One CCO at a small RIA put it plainly:
Employees have to log in so seldom that they forget what they’re supposed to be looking for.
This is the adoption trap built into most legacy platforms. Infrequent use means no institutional memory, which means every certification cycle feels like the first one. Employees who can’t complete a certification without calling someone for help are not a personnel problem. They’re a system design problem.
At a large fund services firm with hundreds of registered representatives, compliance leadership described a structural flaw in their platform’s workflow design. The system marks attestations as complete the moment an employee submits them, with no built-in step for compliance review. The result was that the firm maintained a separate external Excel spreadsheet to track which attestations had actually been reviewed, because the software couldn’t do it. Hundreds of submissions had to be manually cross-checked for accuracy.
FINRA’s 2025 Annual Regulatory Oversight Report cited inadequate written supervisory procedures in over 50 instances across its findings, and identified firms that were “not performing timely reviews of surveillance alerts” and “not dedicating sufficient resources” to review processes. When your compliance platform forces you to do that review work in a spreadsheet sitting outside the system, you are creating exactly the documentation gap regulators are looking for.
At a boutique registered investment advisor that inherited its platform through an acquisition, a compliance associate described a cascade of broken functionality following a software update:
“I feel like our current vendor issues a new update almost three times a day and something breaks every time they do that. Our CCO used to get email alerts from the system to approve things. That does not happen anymore. It broke with an update.”
The Support Problem
One of the most underappreciated costs of this clunky compliance software is the implementation burden: the time, energy, and internal capital required to set up and maintain systems that don’t actually work the way a compliance program works.
A VP of Compliance at a large broker-dealer described a pattern she kept running into with her platform’s support team:
“They have a lot of technology people that don’t necessarily understand the business needs. A lot of what is designed is designed based on strictly programming, without fully understanding the function. When I asked about incomplete audit trails, I got an answer about how the data was configured.”
That’s a product built by people who have never sat in a CCO’s chair and it shows. They aren’t offering a useful solution to a serious platform risk.
The SEC’s Division of Examinations specifically cited “advisers not following their own compliance policies and procedures” and “annual reviews that failed to identify significant existing compliance or regulatory problems” as core deficiency categories. A system that doesn’t maintain accurate records is a massive risk.
What 20 Years in This Industry Taught Us
Skematic was founded by people who spent decades building the first generation of compliance technology, including early versions of the very products compliance officers used to love but now find frustrating.
The philosophy behind Skematic comes from a simple observation: most compliance platforms started by automating a narrow slice of work, then layered on workflow over time. Skematic was built the opposite way: from the ground up as a unified compliance workflow engine, with automations added in a way that natively connect to the workflow foundation.
A CCO at a small RIA captured this perfectly after seeing the platform for the first time:
“It seems like Skematic follows a more traditional GRC workflow setup. With my current system, I can see the calendar entry, but it’s not connected to the underlying workflows like certifications. It just doesn’t work the way a compliance officer’s brain works.”
That comment – unsolicited and in the middle of a product walkthrough – is exactly the problem Skematic was designed to solve.
Four design decisions reflect that philosophy:
1. True Integration, Not Bolted-On Modules
Your compliance calendar, case management, pre-clearance requests, certifications, trade surveillance and compliance policies don’t live in disconnected tabs or separate systems entirely. They operate in a single dashboard, with intentional data flow between them.
When an employee discloses a new account during a certification, a case is automatically created. When a broker feed breaks, you’re notified immediately. The system works as one because it was built as one.
2. Program First Foundation
Every action in Skematic ties directly to the section of your compliance manual that requires it. You’re not just checking boxes but instead you’re documenting why the work exists, what policy drives it, and what the outcome was.
The SEC has cited firms that “claimed to conduct annual compliance reviews but could not provide evidence that one was conducted.” With Skematic, you’re not reconstructing your program when an examiner arrives—you’re exporting it.
3. Modern Technology That Actually Works
Skematic uses API-based broker connections instead of legacy feed technology. When a feed does break (and it happens far less frequently with APIs) employees are notified immediately, and the system automatically backfills historical trades once it’s restored.
This means there’s no data gaps, manual statement collection or reconciliation work.
4. An Employee Experience Built for Infrequent Users
The most compliant employees aren’t necessarily the ones in the system every day – they’re the ones who can log in once a quarter and complete a certification or pre-clearance request in minutes without confusion.
Skematic’s employee experience is intentionally simple: large buttons, pre-populated data, and a single, focused workflow. Simple on the surface, rigorous underneath.
As the COO of a boutique investment bank put it after seeing Skematic’s employee dashboard:
I love this. The idea of getting someone to do something in as few clicks as possible feels like it should be a no brainer for all vendors in this space. And yet, that’s the opposite of what I have right now.
Conclusion
The compliance technology market is going through a generational shift. Platforms that were state-of-the-art a decade ago have been acquired, deprioritized, and weighed down by “tech debt”.
The cost of staying shows up as:
- Hours spent on manual workarounds your platform should handle automatically
- Certifications that stall because employees can’t navigate the interface
- Support tickets that come back with database explanations instead of solutions
- Audit exposure from incomplete records, one-way workflows, and paper statement workarounds
- Internal capital spent defending a system that everyone quietly knows doesn’t work
The word “clunky” sounds like a minor complaint. In a regulated environment, it’s an operational risk that compounds quietly. Until it doesn’t.
