This year regulation technology or #RegTech has been the word (or should I say hashtag) on everybody’s lips (Twitter feed). Ever since Deloitte published RegTech is the New FinTech, a paper explaining this emerging sector of FinTech, RegTech’s status has been consolidated as the new buzzword in the industry. Although, technically it is a subsection rather than replacement of FinTech.
Q.) Why is it that out of numerous #hashtagable portmanteaus and subsections of #FinTech (#PayTech, #WealthTech, #SafeTech, #SecurTech and #RiskTech) that #RegTech is sticking?
A.) RegTech is successful because it merges two hot topics in the industry (digital) innovation and regulation.
As finance companies continue to turn to digital solutions compliance anxieties are at an all-time high. In a recent FinTech Global Report by PwC, financial companies dealing with FinTech listed IT security (53%) and regulatory uncertainty (49%) as the top challenges in FinTech. Enter RegTech. Regulation, instead of stifling the industry is becoming part of its digitalisation. Not only that, it is quickly becoming one of finserv’s hottest players.
Regulation technologies are predominately cloud based and cover a variety of software solutions, promising to monitor, report and manage: transactions, costs, conduct, risk analysis and KYC analysis. All with the aim to ensure that financial companies comply with the latest regulations.
Although compliance and regulation technology has been around for longer, the term “RegTech” has been recognised since 2015, when the FCA called for in-put on the hot topic and announced in the Government budget that:
“the FCA’S ‘Project Innovate’ will work with HMT and the Prudential Regulation Authority (PRA) to investigate the feasibility of developing a regulatory ‘sandbox’ for financial services innovators”
“the FCA, working with the PRA, will also identify ways to support the adoption of new technologies to facilitate the delivery of regulatory requirements – so-called ‘RegTech’”
Since then the regulatory sandbox is in full swing and the FCA have just realised their findings from the call for in-put on the development and adopters of RegTech (20th July 2016). RegTech has been destined for rapid expansion in 2016.
RegTech 2016, the story so far:
RegTech startups are slowly beginning to dominate the FinTech start-up world. The FinTech50, a list of the best and most innovative FinTech companies and start-ups in Europe, has just been announced for 2016. Over 10% of this year’s top 50 were RegTech companies, including:
- Behavox, “Reputational leadership is Compliance 2.0”: Who provide compliance specific tech to the financial services industry.
- FundApps, “Compliance Made Simple”: Their tech “Rapptr” monitors and restricts investments in accordance with the latest industry regulations. This is their second year on the FinTech50 list (they also featured in 2014).
- Suade,“Bridging the Regulatory Map Through Modernity ”: They offer compliance friendly tools to manage costs and easily conduct analysis.
- Sybenetix, “the leading Enterprise Behavioural Analytics™ company”: One of their solutions “Compass” is tailor-made for compliance teams. It uses algorithms to analyse market activity and unusual trading behaviour.
- Tradle, “extending the bitcoin blockchain to non-financial applications”: They use blockchain to achieve user-controlled KYC portability, bridging internal and external financial networks.
There is an up and coming RegTech summit in London, September 2016. With the keynote speech on “New Opportunities Through Innovation – The Evolving Role of RegTech”. Speakers promise to strike the same equilibrium between innovation and regulation that we are coming to expect from #RegTech. Speakers include, Nick Cook Head of Department, Market Intelligence, Data & Analysis for the FCA and voices from some of the hottest RegTech startups: Donald Andrew Gillies CEO & Co-Founder at Passfort, Diana Paredes, the CEO and Co-founder of Suade and Karl Schindler, Head of Content at FundApps.
RegTech was its own category in many of the talks at this year’s FundForum event:
These are just a few influencing factors which prove the substantial momentum that regulatory technology has gained in 2016.
5 #RegTech Twitter Superstars:
With the rise of RegTech comes the rise of the hashtag, here are some of the most influential RegTech companies on Twitter.
A great player to follow if you are keeping up with the rise of #RegTech:
Identiy Mind Global offer risk management and fraud prevention solutions. Including, compliance solutions for Bitcoin start-ups. They tweet content from their blog:
As well as other RegTech driven content:
Trulioo won best identity verification solution, 2016 CNP Award. They weave #RegTech into their Blog content: RegTech: Top 10 Highlights from Around the World and share other #RegTech related content regularly on Twitter:
Jon Jones, Trulioo President is also an outspoken advocate for #RegTech:
Trustev technology eliminates online fraud through real time identity verification. They were named Forbes Hottest Global Startup in 2013. A very friendly Twitter account focusing on the “social” in social media. Although, not as content based as some others.
Vizor claims to be the leading global provider of software for financial regulation. And with their gargantuan follower count who can blame them. They share some great video content on their Twitter feed:
This up and comer with a fractional following is one of the most unashamed advocates of #RegTech:
And an avid retweeter of the latest RegTech news:
Whether or not #RegTech will remain on our Twitter feeds in 2017 is yet to be seen. But, compliance technology will continue to grow as long as digital solutions thrive. Which is set to be a long time.
We @Kurtosys are also committed to the #RegTech movement. Our website and data visualisations platform – used by asset managers all over the world – require us to provide all sorts of compliance oriented features such as snapshotting page views and auditing what data is presented, to what type of investor and in which jurisdiction. These things are all now necessary evils in a world where evidencing digital behaviour is integral to the compliance and regulatory frameworks in which our customers operate.
If you think we’ve missed any #RegTech Twitter superstars, or if you want to join in the discussion you can tweet us or comment below.