A new report, published by Thomson Reuters Regulatory Intelligence, sheds further light on the impact that technology is having on the role of compliance within financial service firms.
The 4th annual Fintech, Regtech and the Role of Compliance Report 2020 has highlighted the ebb and flow of attitudes on the adoption and use, in practice, of technology in financial services.
This year’s report also examines the shifting role of the regulator and global concerns over tackling rising cyber-risk.
The annual report compiles the views of nearly 400 compliance and risk practitioners from around the world. Over the lifetime of the report it has had 2,000 responses and been downloaded 10,000 times by firms, risk and compliance practitioners, regulators, consultants, law firms, and globally systemically important financial institutions (G-SIFIs).
The report also provides insight into how financial services firms’ risk and compliance functions are responding to the issues, challenges, and potential benefits of the current digital and technological transformation of the industry. Rather than looking at individual solutions, the report highlights the key points for firms and boards (along with their risk and compliance functions) to take into account when considering the deployment and use of possible technology-enabled solutions.
The greatest benefits you expect your firm to see from financial technology in the next 12 months are…
Excerpt from: “Fintech Regtech and the Role of Compliance 2020” report,
by Susannah Hammond & Ashley Kovas
A key challenge for firms is the need to acquire the skill sets which are essential if they are to reap the expected benefits of technological solutions. Equally, regulators and policymakers need to have the appropriate up-to-date skillsets to enable consistent oversight of the use of technology in financial services. The report’s findings show that firms themselves, and G-SIFIs in particular, have made substantial investments in skills and the upgrading of their legacy systems.
The financial services industry has much to gain from the effective implementation of fintech, regtech, and insurtech, but the practical reality is that there are numerous challenges to overcome before the potential benefits can be realized.
Investment continues to be needed in skill sets, systems upgrades, and cyber-resilience before firms can deliver technological innovation without endangering good customer outcomes. An added complication is the business need to innovate while looking over your shoulder at the coming threat posed by Big Tech companies.
There are also concerns for solution providers. The last year has seen many technology start-ups going bust and far fewer new start-ups getting off the ground — an apparent parallel, at least on the surface, to the bubble that was around dot-com. Solutions need to be practical, and providers need to be careful not to over-promise and under-deliver; and above all, developments should be aimed at genuine problems and not simply be solutions looking for a problem.