Welcome to the first update of 2019!
Our compliance manager Sam Marden, recently attended the FinTech North RegTech Compliance in Digital World event, so this month’s instalment will focus on what was discussed on the day.
What is FinTech North?
The organisation is an open and collaborative platform for sharing ideas, challenges and best practise, as well as a place to showcase innovative start-ups and scale-ups. With a variety of forums, special interest groups and roundtables, it’s great for facilitating connections and collaborations with like-minded business professionals.
What is RegTech?
RegTech – also widely known as regulatory technology – is a field capable of addressing risk in ‘real time’ and increasing the efficiency of compliance. To date it has focussed on the digitisation of manual reporting, for example, in the context of the ‘know-your-customer’ requirements. This tech has huge potential to enable a close to real time regime that identifies and addresses risk more effectively.
It’s important for regulated firms to have an assurance programme and deploy both preventative and detective controls. RegTech acts as an alternative to more costly resources, and can also reach a wider base.
It is predicted that this approach will drastically reduce the price of regulatory compliance, which is currently estimated to be around $80b globally.
FCA and RegTech
The FCA’s states there are three types of RegTech:
· To support compliance firms
· To improve oversight and modernise regulators
· The reengineer monitoring systems
So, how does this help the FCA?
The FCA has a single objective – to ensure that relevant markets function well, and this is only possible if consumers are treated fairly. All financial products and services available to buyers should be marketed and sold in a way to allow them to make informed decisions.
What does the RegTech team do?
· TechSprints – more commonly known as hackathons, these are events in which software engineers, graphic designers, project managers and subject matter experts, collaborate intensively to solve specified problems through building prototype technology solutions
· TechTalks – cross-industry dialogue and discussions on innovative tech
· Accelerators – engage with accelerator and incubator programmes to help them target investment
· Trials, Research and Modernisation – the FCA is experimenting and adopting a number of RegTech solutions. Their projects include natural language processing, chatbots, social media analytics, graph analytics, machine-learning and visual analytics AI
· TechKnowHow – running sessions where technology thought leaders are invited to inspire and educate FCA colleagues about financial innovations and new technologies
· International – the FCA engages with multiple international regulators on RegTech activities and advanced analytics projects, sharing best practice and learning from others
It is clear that the FCA is keen to see more tech adoption in compliance, and paper reporting processes becoming less frequent. Due to the organisation supervising more then 50,000 firms in the UK, who provide financial products and services to customers – UK and internationally – obtaining assurance through tech is the key to reducing costs and gaining wider insight.
There were many well informed talks on the day, but the key takeaway was the ability for organisations to be agile and quickly adapt. For example, the use of an open API platform can create easy integration of hundreds of different data enrich sources.
It was an interesting and thought-provoking day and one we can all learn something from!
If you’d like to find out more and read the official write up from the day, follow the link.