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There is no doubt about it – RegTech is hip. Bankers dangle the word over their working breakfasts, while technology teams slather it on proposals they are seeking funding for, along with its cousin, FinTech. The term is a contraction of “regulatory” and “technology” that seems to have no sense of irony about just how traditionally uncool the two words that compose it often are. Yet, this is an area so very hot that the regulators themselves have begun to wade in, in some cases even working directly with RegTech initiatives to help get solutions to market.
Investment managers could be forgiven for wondering what all the hype is about. Many are looking at the RegTech hysteria and asking, “What’s in it for me?” The answer is, “Actually, quite a lot.” Not all RegTech involves hiring an entire banking floor of scooter riding 21-year-olds to figure out blockchain, or partnering with a tiny start-up which doesn’t comply with third-party risk rules. New, exciting, and sensible RegTech innovations are being developed specifically for the compliance teams within the investment management industry.
One area of focus for RegTech innovation lays in helping compliance teams implement new rules more effectively, across all the organizational groups they must now engage with. Compliance teams at investment management firms are today caught in the cross-hairs of three converging trends:
Today, RegTech innovation is developing ways to bring these three strands together into a single platform – to help compliance teams improve collaboration across their wide stakeholder networks to enable regulatory change.
Sound interesting? Then it’s important to engage with RegTech, and to engage the entire firm with the reality of RegTech. Simply put, the organization needs to understand how the compliance discipline is evolving, and that the firm must evolve, too. Compliance needs to become truly technologically enabled. Key ways to help raise the profile of RegTech and how it could help a firm include:
By engaging proactively around RegTech, the compliance team can help ensure the firm will be able to meet its obligations in the future, as well as protect it from those things that keep executives up at night, such as an inadvertent compliance failure. Organizations need to understand that investing in RegTech for compliance is not a “nice to have” but should be part of the way it actively seeks to better manage compliance and reputational risk going forward.
So, while RegTech may seem impossibly scary, or hip – or both – it’s important for compliance teams to better understand the benefits it could potentially deliver. It’s also crucial for teams to communicate about, and prepare for, RegTech within their organization.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
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02 October
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Ruchi Rathor Founder at Payomatix Technologies
30 September
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