The biggest challenge in the financial services industry is the sheer number of regulations and the speed at which regulatory complexity is increasing according to Ralf Huber, co-founder of Apiax.
With this challenge in mind, the company offers its clients ‘a lean yet comprehensive solution’ to transform complex regulations into digital regulatory rules and to manage these rules efficiently. Its solutions allow users to ‘regain control’ over regulatory developments, to increase regulatory certainty and to become efficient and innovative again according to Huber.
“A lot of companies tackle specific challenges like monitoring payment transactions for suspicious transactions or securing digital interactions. We think that the core of the RegTech industry is the digitalisation of regulations and to connect the know-how from regulatory experts such as consultancy firms with financial institutions in a way that empowers today’s digital processes and products. This is where we see the biggest potential for RegTech providers.”
Apaix is a big advocate of a machine-readable regulatory environment, which has the potential to transform and change the financial services industry according to Huber. The machine-readable regulations have the potential to increase efficiency, but also the quality of regulatory compliance.
“Once digitalised regulatory rules can be used in different digital processes and solutions, which allows financial institutions to scale regulatory work and keep costs under control. Ultimately, machine-readable regulations allow financial institutions to master regulatory challenges and focus on business development and client satisfaction again.”
Regulatory technology has emerged out the FinTech landscape, promising to reduce the burden on compliance offices and risk managers, whilst also improving the customer experience and reducing costs. However, despite the promises benefits, adoption in the industry is yet to be fully realised. Going forward the key enabler to RegTech adoption is the widespread understanding that the way regulations are mastered today needs to change according to Huber.
“Our sparring partners clearly see that they need to find new ways to keep up with regulatory complexity, rising costs and decreased innovation. The biggest barriers come on the hand from the fact that RegTech solutions touch upon many different business units which must be coordinated.”
Despite the barriers, Huber believes ‘a mindset shift’ is required in the regulatory space since today, many experts still rely on paper-based processes. But in general, financial service providers are open to RegTech solutions and see ‘their benefits very clearly.’
His advice to financial service providers is to propel their regulatory work into the twenty-first century, to start digitalising their regulatory knowledge and to benefit from the potential of powerful digital solutions that help them master regulatory complexity and make regulatory ‘compliance lean and efficient again’.
The EU’s Second Payment Services Directive (PSD2) and its UK implementation, ‘open banking’, is set to alter the structure of retail banking. However, rather than fearing the looming implications, Huber believes the regulation ‘offers ample opportunities for financial service providers’.
“Where it helps them to advance their business and offers real value-added to clients, financial institutions should cooperate with third-party providers. As a RegTech company, the benefits of open banking are very clear to us. We can offer our clients the agility of a lean startup and provide them with innovative technology that will help them tackle their challenges. There is huge potential in these relationships for both parties.” By combining ‘extraordinary legal expertise’ with ‘outstanding technological capabilities’, Apiax’s has created a product that is useful to regulatory experts as well as perfectly suited for the open banking- and API-economy, Huber added.
Unlike other RegTechs in the market, Apiax offers its clients a platform on which they can transform regulations themselves, but also access ready-to-use digital regulatory rules created by its premium content providers.
“We find that different clients have different needs for these software-as-a-service (SaaS) and regulatory-as-a-service (RaaS) solutions, but obviously, they can also be combined. Our clients can buy regulatory rule sets and then adapt them to their in-house preferences, for instance.
“We also offer a rule engine, an API and a mobile app to complete our offering. We are very proud to offer a lean yet comprehensive solution that clients can adapt to their needs and integrate into their systems very easily.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
