RegTech is playing a critical role in reducing cost and risk while improving conduct and competition writes Jason Boud in Fintextra. The article sought the views of CEOs and senior managers with industry and regulation experience. The consensus is that RegTech is enabling institutions to move beyond damage limitation through clearer regulation taxonomies and proactive business models.
“There is no doubt the technology has matured, but more important is the understanding and acceptance by our clients has increased in the last 2 years. We see compliance (surveillance & reporting) as a recent use case but we add value by being able to understand team performance and behavioral decision-making.” Boud quotes Taras Chaban, CEO of Sybenetix.
With three quarters of investments aligned to regulatory related activities, RegTech has a ‘golden opportunity’ as part of broader digitisation and supply chain disruption writes Boud.
He quotes Evgeny Likhoded, CEO of Clause Match. “The FCA regulates 55,000 firms from small to very large. New (regulated) entrants into the market face a big barrier to be compliant, both in reporting but in conduct. Even if they get over the barrier, the 2nd issue they face is regulatory change - how are you informed of the change and how do you assess the impact on you?”
Taras Chaban continues, “The sheer volume of data to be reported and monitored makes technological solutions an absolute necessity. Just look at transaction reporting in the UK, the FCA has signed an agreement to capture and store the data in AWS, such is the scale and complexity of MiFDII reporting.
“We free up the time of Compliance Officers to do proactive tasks, such as investigating alerts before the regulator comes knocking on the door. We are also working in the Algorithmic trading space and starting to investigate partnerships to increase our presence in the marketplace,” Chaban concludes in the article that you can read at Finextra.