Introducing the RegTech Working Group

What is RegTech? Where are the barriers to adoption? What opportunities exist for 2018? And how can we help?

Thanks to our new RegTech working group, these are questions we’re now a little closer to answering. I was delighted to co-chair the inaugural meeting of the group, which brought together players from across the space. Together, we looked at how RegTech will evolve throughout 2018 and how we can collaborate to accelerate its adoption. It was the first of a series of sessions that will identify key topics and issues and help build a forward plan for the London RegTech scene.

So, what did we discover?

What is RegTech?

Simply put, it’s using technology to ensure compliance with regulation. It enables financial institutions to answer regulatory challenges faster and easier, and it improves processes by reducing cost and risk.

But it’s also about innovating in a way that goes beyond technology. RegTech is all about new ways of thinking and doing things; it’s about removing the constraints of legacy processes and lack of collaboration to open up new opportunities. And as RegTech continues to grow apace, it’s increasingly technology that’s leading developments in regulation – not the other way around. As the landscape continues to evolve, RegTech will be key for defining and driving outcomes.

What are the barriers to growth for RegTech?

Unsurprisingly, lack of education, collaboration and consensus are common frustrations. On the banks’ side, fear of failure and risk aversion are the biggest blockers; at the regulators’ end, the complexity and sheer pace of regulation present problems. Poor communication between the two exacerbates the issues.

RegTech itself isn’t without challenges, however. Engagement speed with large banks remains a hindrance. That, coupled with the difficulty of sourcing talent in such a highly skilled area, might prove RegTech’s biggest blocker.

What are RegTech’s big opportunities for 2018?

While the pace of regulation can be challenging, it also presents an opportunity for RegTechs who can help financial institutions shoulder the burden. And with the implementation of PSD2, GDPR and MiFID II all on the horizon, 2018 looks set to be a bumper year.

These new regulations also bring with them an opportunity for much-needed collaboration. As RegTech matures, we expect to see tech people working more closely with policy makers and regulators so that policy is shaped with more understanding of how it can actually be implemented.

Goals for the working group

Since the biggest blockers are around collaboration and education, that’s where this group will start. It’ll be a place to share best practices and help each other understand the varied RegTech landscape. Ideally, it’ll also help us define a common standard that the whole industry can shape and evaluate their RegTech solutions by.

Building relationships that help financial institutions, regulators and RegTech providers engage and understand each other is fundamental. Using those relationships to deliver real, tangible results will be key. It’s an ambitious vision, but one I’m confident this working group can achieve.

If you’d like to add your voice to the debate, or register to attend the next working session, contact us.