The FT has reported on the potentially huge market for RegTech, driven by financial institutions needing to reduce cost when meeting new regulation and regulators supporting innovation.
Martin Arnold writes about the RegTech companies that are making compliance less complex and capacity-demanding in strategically important areas such as stress testing, risk, identity and conduct management.
“Companies such as Sybenetix are riding a wave of interest in using technology — such as cloud computing, artificial intelligence and biometrics — to help the financial services industry meet the tsunami of regulation unleashed since the 2008 banking crisis,” according to Arnold.
According to the report in FT’s Future of FinTech series, leading banks are as spending a $1billion per year on compliance and controls. Regtech solutions could free capital to put to more productive uses, according to the International Institute of Finance.
Regulations such as MiFID II will drive more demand for Sybenetix’s conduct management systems. “The banks will have to collect much more data on trading than currently required – that’s really exciting for us,” According to Sybenetix CEO Taras Chaban in the article. “One important point for me is how we help all the small organisations who will find it hard to meet the new requirements from regulators and that could lead to the creation of even larger banks and asset managers, which is what I fear as it would make them even more too-big-to-fail,” Chaban is quoted as saying. You can read the full article in the FT’s Future of FinTech series.