Innovate Finance, City of London Corporation, and Encompass Corporation have teamed up to create a RegTech Platform, with the objective of speeding up industry initiatives, tackling key challenges within the Fintech space, and connecting RegTech providers with regulators. By providing practical insights and guidance, this platform, which involves leading industry companies, will give a fresh boost to RegTech providers while also addressing key issues in the sector.
Implementing RegTech solutions often pose complex challenges for financial services organisations. From understanding potential providers to defining their own business objectives and figuring out how they can be attained, these are all challenges that have given rise to this novel group. By shedding light on the industry and its solutions, this group aims to help stakeholders navigate their journey in this rapidly evolving sector.
As part of this platform, the RegTech Test proposal has been launched at UK FinTech Week. The proposal highlights how involving RegTech in the formation of regulatory policy might impact existing compliance technology stacks. It also discusses how freshly minted RegTech solutions can help firms meet policy objectives more efficiently. This proposal forms part of a paper discussing the three vital roles of regulators in the financial services industry, namely, policymaking, supervision, and enforcement.
Innovate Finance argues that the immense potential of RegTech has not been fully realised, despite its significant benefits. The introduction of the RegTech Test, as well as other initiatives aimed at supporting regulated firms, is expected to contribute towards better regulatory standard compliance.
The regulatory framework, majorly involving Know Your Customer (KYC) norms and anti-money laundering (AML) rules, is evolving rapidly. Regulators have reacted to these changes with newer regulations to combat financial crime at a global level. It's in this context that the RegTech Platform aims to help businesses by raising awareness and educating about RegTech's potential.
Dr Henry Balani, Global Head of Industry & Regulatory Affairs for Encompass Corporation emphasised the importance of effective regulations which financial institutions can implement swiftly and efficiently. He said, "Financial crime is an increasing global concern, leading to the development of new regulations. The key challenge lies in ensuring financial institutions have efficient systems to adapt to changing obligations, especially when compliance processes are largely manual."
Commenting on the transformative impact of RegTech solutions, he added, "Regulators, given the assurance of the effective utilisation of the latest RegTech solutions, will equip financial institutions for transformative changes, both in compliance and ultimate business growth and efficiency."
Speaking on the role of RegTech providers, Dr Balani said "it is imperative for RegTech providers to have a clear voice and, concerning regulations, a seat at the table. We aim to improve alignment and collaboration between RegTech providers and regulators, benefiting everyone, including financial institutions. By raising awareness and educating, we hope to strengthen the ecosystem, continue making progress in combatting financial crime, and facilitate the adoption of transformative technologies and technology-driven processes."