Does regulation stifle innovation? Find out how five of our panelists and speakers at the recent Thomson Reuters Risk summit tackled this and other key regtech topics.
The relationship between regulation and innovation provoked an interesting exchange of views at the summit, not least from the 35% of the audience who felt the burden of compliance was impeding fintech progress.
Our Reuters Editor-at-Large, Axel Threlfall addressed this when he spoke to five industry experts at the London event before asking their views on some of the other hot topics in the risk, compliance and regulation sector.
The experts were:
- Alastair Lukies, entrepreneur and chairman of Innovate Finance
- Christian Hunt, Head of Compliance and Operational Risk Control EMEA, UBS
- Edward O’Callaghan, Partner, Clifford Chance
- Nirvana Farhadi, Global Head of Financial Services RegTech, Risk & Regulatory Compliance Affairs, Hitachi
- Wayne Johnson, CEO & Co-Founder, Encompass
Their interviews are all available as podcasts.
Watch video — Financial Regulation Summit: Key highlights and insights
Good for innovation
Nirvana Farhadi presented a strong case for the positive role played by regulation.
She said: “Regulation is fantastic for innovation and in fact, it encourages innovation and makes you think outside the box. It makes you become more creative. I think absolutely it is great for innovation.”
Edward O’Callaghan added that the regulatory landscape was not going to get any easier, meaning that organizations will need to:
- innovate and have more ideas
- look for investment opportunities
- look to expand and grow
Alastair Lukies, who is the prime minister’s Business Ambassador for Fintech, pointed out that “unregulated innovation in the fintech or medtech industry is not a good thing.”
Talking more on the impacts of technology, fintech and regtech, UBS’s Christian Hunt said his organization had recently launched an incubator in order to foster innovation as a key driver for business growth.
He said: “We’re investing in start-ups because we recognize the importance of it. Our clients are becoming more demanding in their expectations, and so we have to respond to that.”
He added that technology was “absolutely critical“ in dealing with regulations such as Know Your Customer (KYC).
The importance of innovation as banks and financial institutions seek to meet ever-increasing demands on KYC cannot be over-estimated — as our recent blog post on driving KYC innovation through managed services explains.
Nirvana Farhadi suggests that we can’t keep being so reactive to everything coming down the pipeline and that we need to think more strategically.
She said: “Compliance operations, risk and audit are not revenue regenerating areas of the business, so we need to think about innovation and technology, and how that could be applied to take regulatory burdens away.”
— Nirvana Farhadi (@NirvanaFarhadi) May 22, 2017
Read more about the dynamic landscape impacting the rise of regtech around the world and discover the critical considerations for all relevant stakeholders in the industry to harness the intended value and innovation.