Amid an increasingly globalised business landscape and with regulators tightening consumer protection laws, keeping up with financial services compliance can be challenging. Therefore, it’s no surprise that RegTech – technology designed to make it easier to manage regulatory challenges – has exploded in popularity.
Recently, Engage Hub’s Colm Dowd attended the RegTech Association #RegTechEdgeNoBorders event to discuss the challenges (and solutions).
Here are 4 of his biggest takeaways.
1. More regulation = increased appetite for tech adoption
The recent spate of economic crises has triggered a surge in regulation across the financial services industry. To address the increased demand for sophisticated governance, data management, reporting and operational processes, established banks and firms (who have historically been wary of new tech) are collaborating with innovative RegTech start-ups, forging partnerships to tackle these challenges.
This increase in demand – combined with significant technological advances and access to cloud-based technology – has significantly lowered the barrier to entry for new RegTech. Start-ups can now compete against more established competitors to offer customised, scalable and secure compliance solutions.
2. Compliance is no longer a tick-box exercise
The arrival of more customer-centric regulations like Consumer Duty means firms can no longer just tick a series of boxes and declare themselves compliant. Now, they have to provide robust evidence that they take an outcomes-based, proactive approach.
RegTech is helping firms efficiently manage this increased burden, enabling them to keep abreast of evolving rules while maintaining focus on their core offerings.
3. Transparent data standards are key
There are many benefits to implementing a data standard as part of a RegTech strategy, such as reduced costs, increased innovation and freedom from vendor dependency. The regulatory demands for interoperability are pushing firms to adopt open, API-driven architectures – ensuring transparency and seamless data movement within their networks.
4. RegTech providers must demonstrate ROI
The early days of RegTech were all about proof of concept. Now, it’s all about proof of value.
RegTech providers must demonstrate how they’ll deliver a significant return on investment if they want to compete. For some, this means highlighting the cost-efficiency of off-the-shelf (yet customisable) RegTech solutions. For others, the focus is on developing bespoke, in-house solutions that integrate with complex internal systems. Either way, RegTech firms need to home in on the value they’ll deliver, while also establishing their credibility through case studies and recommendations.
Final thoughts
As the financial services industry continues to evolve, adopting RegTech solutions to streamline compliance remains crucial. Technology plays a transformative role here, enabling firms to navigate the complex regulatory landscape more efficiently.
Growing partnerships between financial institutions and RegTech companies promises a future where challenges are met with innovation, driving the industry forward into a more streamlined and compliant future.
For more on the RegTech Association event or to find out how Engage Hub can help you keep on top of your compliance, get in touch.
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Recently, Engage Hub has broaden its global footprint by acquiring Engage Interactive – an Australian provider of customer engagement and interactive promotion solutions. The acquisition significantly enhances Engage Hub’s ability to deliver journey orchestration solutions directly to organisations in Australia across multiple sectors.
