Compliance executives have no choice but to embrace FinTech and Regtech at financial services organizations, said participants at the 2016 Thomson Reuters Compliance & Risk Summit in London.
More than half (52%) of attendees recognized that they must begin to introduce FinTech and Regtech solutions to their organization, while some 26% said they have already budgeted for plans to introduce either FinTech or Regtech over the next 12 months.
More than 800 people attended the summit – 84% of whom were in a risk management, internal audit, or regulatory compliance role.
Time for action
In session after session at the all-day event, compliance executives acknowledged the need to embrace technology to solve a range of compliance challenges, driven by the high degree of regulatory change.
From performing Know Your Customer (KYC) checks during client onboarding to understanding risk in supply chains, to keeping up-to-date on changes to regulation and laws themselves, never before has there been such a need for the application of technology.
Strength in numbers
At the summit, 52% said that they would be hiring more people.
This is a common approach in the industry. Historically, compliance teams have simply expanded to work on specific regulatory change mandates – either by hiring in or by outsourcing.
However, interest is gradually turning to the potential value of a more data-centric approach to compliance. As well as modernizing compliance processes, it could also reduce costs and mitigate the operational risks associated with those processes.
So where will FinTech and RegTech focus on?
One big area is Third Party Risk – and in particular, supplier risk. Through the use of technology, organizations can get a more holistic view of the systemic risk that resides within their supply chains.
Organizations can also be better informed about the nature of those risks, enabling them to take a more risk-based approach to managing their supply chains.
The same is true of KYC processes at financial organizations. Recent research conducted for Thomson Reuters shows that financial services organizations are turning to technology to better manage client onboarding and due diligence processes.
Compliance executives realize that simply hiring more people to perform KYC processes is no longer a sustainable proposition. Worse, it can lead to very serious compliance risk and regulatory risk issues due to simple human error, as well as loss of revenue due to poor client experiences.
Across a whole range of challenges, compliance teams are realizing the need to embrace the FinTech and Regtech revolutions – to ensure their processes are based on robust data, can evolve with regulatory change, and to more efficiently manage compliance resources.