Effective RegTech is about data not technology
- Sam Leonard
- Jul 13, 2021
- 2 min read
Effective RegTech is about data not technology
It is not surprising that RegTech attracted so much money and so many entrepreneurs as the Fintech start-up boom took off from 2012. Banks, asset managers and insurers were hit by successive waves of regulation in the long aftermath of the great financial crisis of 2007-08, and automation of transaction monitoring and reporting, KYC, AML, CFT and sanctions screening checks, data protection, mis-selling risk, cyber-security and even operational resilience was an easy sell. A future in which regulators were just another node on a blockchain network which hosted everything they needed to know seems more distant today than it did in 2017-18, and the RegTech sector is now consolidating. But as Rupert Brown, CTO at regulatory advisers Evidology tells Dominic Hobson, the hard work of mapping and then standardising regulatory events and data flows is now beginning.
Questions that are being asked
Has RegTech become pigeonholed?
a) Transaction/Balance Sheet reporting
b) Surveillance
c) A new workflow system (usually for KYC)
d) Most regtech suppliers provide point solutions to a specific subset of regulations that have been around for many years – why is the industry still stuck on them ?
What is the RegTech supply chain ?
a) Where do Regulations come from
b) How are they assessed/interpreted
c) What is the relation between a “Control” and a Regulation
d ) How are they enforced
e) What happens when regulations evolve – case law etc
Why isn’t “digital transformation” happening in Regulation ?
a) Are the regulators competent to change their modus operandi
b) What assets/definitions to regulators own and maintain
c) What if advisory and control content had standardised formats and interchange mechanisms
d) Who would be most impacted and why if supply chains and formats were “digitalized”.
Agile Compliance
a) How do you demonstrate initial compliance
b) How do you stay compliant
c) Identifying drift
d) Controlling drift
e) Understanding the impact of change
KISS Principle
a) Data management principles come first ?
b) How many workflow systems and states does a company have ?
c) AI is not a remedy for basic good housekeeping
RegTech vs FinTech vs Cyber Security
a) Where are the boundaries
b) What can each sector learn from the others
c) How do we cut down on “Ambulance Chasing”
d) Spotting the real winners
