Following the launch of TAS’ third Compliance Index, we interviewed Deborah Young, CEO of The RegTech Association on her insights on the report. Here we explore her thoughts on the rise of RegTechs and the role they play in solving regulatory challenges.
What stood out to you in TAS’ third Compliance Report?
The key thing for me was the findings around organisations reluctance to partner with RegTechs. We have seen it first hand, banking and finance institutions are nervous of the unknown and are hesitant when it comes to new technology. Understandably when an unknown brand approaches a top-tier firm they are going to get push back. Organisations are much more likely to partner with technology offered by trusted sources. And this is what we are trying hard to address through our partnerships at the Association.
For example, Microsoft recently became a member of The RegTech Association with the aim to stay on top of innovative and cutting-edge tech solutions and partner with RegTechs developing them. Through this partnership, RegTechs can get a foot in the door so to speak, remove some of the nervousness around new and untested technology and build credibility; conversations with major financial institutions becomes easier.
What role does the RegTech Association play in the compliance sector?
The RegTech Association grew out of frustration technology firms were feeling with banking and financial institutions. Despite the industry being in turmoil and the RegTech industry booming, organisations have been reluctant to explore and embrace new solutions. The RegTech Association offers a platform that brings together government, regulators, regulated entities, professional services, and founder-led RegTech companies to ensure collaboration between all parties. It offers a more powerful voice in the sector and allows members to engage with the right people and have meaningful conversations around using technology to solve regulatory challenges.
What does the future of regulatory compliance look like?
The future of regulatory compliance relies heavily on collaboration and partnerships between the industry and RegTechs. There has been some evidence to suggest that financial institutions are starting to pilot new technology to help with meeting their compliance requirements. While this is encouraging, there is still a long way to go. Many financial institutions are steeped in legacy and it is hard to get business alignment with RegTechs. We need to keep working hard at changing this – compliance scrutiny will continue to increase, and disruptive technology is here to stay. When we help organisations realise the power of technology in meeting their compliance requirements we will see a different compliance landscape.
What advice would you give organisations considering partnering with RegTechs?
At our recent conference, #ACCELERATERegTech2019, a panel of experts made the observation, that to be effective, RegTech must become embedded in the workflow, procedures and systems of an organisation, while respecting rather than replacing existing infrastructure. Organisations who grasp this and see RegTech as an enabler of productivity and efficiency, will have a competitive advantage.
Australia is the third-largest global RegTech hub after the US and Britain which means there is cutting edge technology on our door step. Partnering with a RegTech gives you access to this leading technology and helps organisations stay compliant. The opportunities are endless!