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Regulatory Risk

How RegTech can transform your regulatory compliance

Andrew Yuille

15 Aug 2017

Photographer: Kevin Coombs
Photographer: Kevin Coombs

The power of RegTech goes beyond just simplifying compliance and cutting costs. It secures competitive advantage, Andrew Yuille, Head of Risk Business Solutions, tells Finextra.

About US$80 billion is currently being spent on regulatory compliance across the financial industry, a figure set to rise by 50% to $120 billion in the next five years.

Find out more about Thomson Reuters Compliance Learning 

That’s a lot of resources not being spent in other areas, such as new products, on meeting capital adequacy requirements or returning cash to shareholders.

It’s also money that could help make institutions more competitive.

As this cost burden continues to rise, it’s no wonder that RegTech is attracting considerable interest and investment from risk and compliance professionals.

Andrew Yuille, Head of Risk Business Solutions, Thomson Reuters
Andrew Yuille, Head of Risk Business Solutions, Thomson Reuters

Watch video — How RegTech can transform and simplify compliance

Onboarding challenge

RegTech solutions are already a powerful force as the industry seeks more digital-centric and innovative ways of reducing costs.

This was highlighted in our Cost of Compliance 2017 report, with firms signalling their willingness to find alternatives to ever-increasing regulatory budgets.

Thomson Reuters KYC as a Service is a great example of a RegTech solution that is working effectively to help financial institutions deal with their compliance requirements.

This Know Your Customer (KYC) product accelerates onboarding, improves the experience for the customer and delivers cost savings and simplification for organizations adopting it.

As it can sometimes take three to six months to gather KYC documentation, it makes more sense to build that record once and share it across organizations that need it.

Infographic to demonstrate the role of Compliance in FinTech and RegTech
Infographic to demonstrate the role of Compliance in FinTech and RegTech

Find out more about Thomson Reuters Compliance Learning 

Regulatory alerts

The pace of international regulatory change has increased over the last ten years.

If we go back to 2008, we were tracking about 10 regulatory changes per day, whereas in 2016, we were tracking over 200 changes per day in regulation.

Institutions are forced to use resources to track these regulatory events, determine how relevant each event is to the business and then decide on whether there are changes that need to be made to policies and procedures.

RegTech innovation

Integrating Regulatory Change Management solutions directly into compliance workflows is just one area that is already benefiting from RegTech innovation.

Our own market-leading solution connects the regulatory content and change management process to organizational structures, policies, risks and controls, streamlining the effort of compliance teams.

Example of the Main Dashboard in Thomson Reuters Regulatory Change Management
Example of the Main Dashboard in Thomson Reuters Regulatory Change Management

The future of compliance beyond 2020 must be planned with the expectation of continued demands from regulators.

Against this backdrop, there is no doubt that the continued and considered application of RegTech will be essential for firms focused on delivering a positive customer experience and seeking to simplify compliance.

Are buy-side firms ready for MiFID II? Beyond MiFID II: how to secure competitive advantage Publishing to APAs: what’s the MiFID II solution? The KYC challenge: full steam ahead on innovation How to achieve a connected view of risk Best execution: what role do FX algos play? The Risk Report: regulatory intelligence worth listening to Eikon App Studio: what can it do for you? The data analytics solution ready for MiFID II How will your organization cope with the new data requirements brought by new regulations?