As 2019 comes to an end, RegTech Analyst asked three RegTech leaders about where they think the sector is going in 2020.
2019 was full of important milestones for the RegTech industry. In the EU, it saw the revised Payment Service Directive (PSD2) mostly come into force in September, creating a slew of opportunities for API-led enterprises.
It also created new challengers for the financial services, for instance about how to successfully implement the new strong customer authentication rules that force services to provide a two-stage identity verification process when people buy things electronically.
SCA and PSD2 are sure to play a big role in 2020 as the European Banking Authority (EBA) has empowered local authorities to extend the deadline for these rules. The UK’s Financial Conduct Authority is one of the national watchdogs that have taken the EBA up on its offer.
Elsewhere, 2019 has seen the number of RegTech deals increase to 230, a huge jump from the 125 deals enjoyed by the industry in 2014, according to RegTech Analyst’s research.
This was also the year when the Australian government launched a committee to look into how the nation’s RegTech companies could be supported to scale, companies moving to live up to the regulations of the EU’s Fifth Anti-Money Laundering Directive whilst preparing for the sixth one, RegTech Analyst revealed the third annual RegTech100 list of the most innovative companies in the industry, and many, many other key events.
Given all that has happened in 2019, RegTech Analyst wanted to find out what some of the key players thought of the year that has been and what they see when looking towards 2020.
Anthony Quinn, founder and CEO of Arctic Intelligence.
What are you proudest of having achieved with your company in 2019?
“One of the proudest achievements that Arctic Intelligence has this year was winning the Australia Fintech Awards, RegTech of the year among some pretty stiff competition.
“In addition to this we are really proud of the technology innovations we have been making and that we have won the trusts of our clients across 15 industry sectors and in many countries including Australia, New Zealand, UK, Canada, US, South Africa, Hong Kong, Singapore and others.
“This is really the recognition for our dedicated team who show up every day giving 110% to drive the business forward to achieve our vision to provide cost effective audit, risk and compliance technology to regulated businesses regardless of their size, sector or geographic location.”
What is your New Year’s Eve resolution for the company in 2020?
“We need to pause and reflect on our wins, losses and what we can do better as a company and as individuals and teams in making an impact.
“Often when running at speed it’s very easy to get caught in the moment and not taking the time to smell the roses and detach from the day to day to have the headspace to think deeply about what will be required to get to the next level.”
What do you think will be the biggest thing happening in RegTech in 2020?
“The most amazing thing is that RegTech is a ‘thing’, it’s not going away. The Value of RegTech is unquestionable and the sector as a whole has found its voice by contributing to the discussion and leading the way that innovative audit, risk and compliance technologies can deliver significant value to clients.
“In some pockets adoption is still slow and I hope that 2020 becomes the year where early adopters that have paved the way for RegTech to become mainstream and for Boards and Regulators to be asking “are we using RegTech and if not, why not?” , rather than a few visionaries willing to experiment, learn and support this emerging and growing sector.”
Arbela Takhsh, COO of Ascent
What are you proudest of having achieved with your company in 2019?
“2019 has been a huge year for us, but the crowning achievement has to be the completion of our Series B funding round, where we raised $19.3m. This effort was the culmination of a lot of very hard work by our dedicated and talented team.
“It also serves as an exciting indicator from the market and from global banks – including ING and Wells Fargo, who participated in the funding round – about where they believe the industry is headed.
“To us, this investment is a clear signal that these institutions are bought in on RegTech broadly and Ascent specifically. It also serves as a strong sign that the market is rapidly maturing. While 2019 has been a banner year, we believe this funding is going to set us up for even bigger things in 2020.
What is your New Year’s Eve resolution for the company in 2020?
“Cultivating a ‘Yes, and’ mentality with our customers. By this we mean understanding the needs our customers have now and then building on them to exceed their expectations. Part of this is related to ramping up our automation capabilities as we scale.
“Another part is rolling out new solutions to meet the evolving needs of our customers. All of it is in service of going above and beyond in our mission to reduce the costs and complexities of regulatory compliance and to create a world that’s empowered, not constricted, by the rule of law.”
What do you think will be the biggest thing happening in RegTech in 2020?
“2020 is going to be the year that financial institutions start to see the true value that RegTech companies can provide. The industry is currently situated at a confluence of factors. RegTech ventures are moving out of the innovation phase and entering a production environment.
“Those that can lock down operationalizing and scale will be able to offer powerful solutions to financial institutions. And those solutions are going to be meeting an increasingly dire need.
“The continuing trend of globalization in the finance sector makes the job of risk and compliance teams exponentially more difficult. RegTech offers not just the only route forward, but an increasingly effective one.
“As Ascent founder and CEO Brian Clark put it, ‘RegTech is no longer just for early adopters. We’re starting to see the actual, tangible benefit these technologies can provide.’”
Panayiotis Omirou, CEO of MAP FinTech
What are you proudest of having achieved with your company in 2019?
“2019 has been a milestone year for MAP FinTech. Our firm was selected as the Best RegTech/Reporting Solution at the 2019 Finance Magnates London Summit and listed in the RegTech100 Index as one of the 100 most innovative companies in the world for 2020. Furthermore, we have improved our selection of services with new innovative RegTech solutions such as Best Execution Monitoring, AI Transaction Monitoring Screening (AML), and Trade Surveillance (Market Abuse). With these new products in place, our award-winning Polaris platform is now expanding into other regions, where it can help global business clients simplify and resolve their various regulatory challenges.”
What is your New Year’s Eve resolution for the company in 2020?
“Our New Year’s resolution for 2020 includes the further expansion of our existing products, the launch of new innovative tools to add to our award–winning platform, and the grand opening of our office in London, a move that will help us consolidate our global presence and reach thousands of potential new customers.
“Moreover, it is very important for us to maintain and improve the quality of our support services, which have proven to stand out from traditional support levels. New client support technologies will be introduced to assist us in further improving the efficiency and quality of the two most important processes found in RegTech projects: initial onboarding and day-to-day support.
“As a follow-up to what has been an outstanding year for MAP FinTech, we resolve to continue delivering exceptional, innovative and one-of-a-kind solutions to our clients and partner firms. This includes our best-in-class regulatory reporting technology services and RegTech tools that allow our loyal clients to meet their regulatory reporting requirements and achieve best results.”
What do you think will be the biggest thing happening in RegTech in 2020?
“One of the biggest trends we expect for 2020 will be the continued development of AI technology in the RegTech field. Even though at its early stages, AI research is expected to solve many problems, especially in the field of big data consolidation and identification for regulatory reporting purposes. In addition, AI will significantly enhance the general monitoring and adaptation to the continuous regulatory changes. As MAP FinTech, we are actively researching AI and how it can help us overcome the limitations that currently exist in the available technologies.
“Looking ahead, however, the most important trend is the ongoing evolution of the regulatory world. Without a doubt, technology is transforming the way our industry operates. For instance, old processes are being curtailed or automated as a way for firms to boost efficiency and cut costs. Additionally, new delivery and communication mechanisms have sprouted, allowing firms to engage with their customers and business counterparts in ways unfathomed ten years ago.
“Considering the high levels of regulation facing the financial services sector, it makes perfect sense for firms to rely on efficient and cost-effective technologies to manage and fulfill the multiple regulatory compliance functions required to run their businesses while remaining compliant before the law. With this trend gaining momentum, it’s imperative for firms to embrace RegTech and fully understand how these technologies can impact your business moving forward. It’s not enough to simply react to the compliance requirements imposed by new regulations as they are brought into line; firms must prepare ahead of time to tackle the rules that will be rolled out during the next five years and beyond. Consequently, adopting a solid RegTech framework to effectively comply with all financial regulations could also help boost a firm’s profitability and overall efficiency.
“It’s fairly obvious that RegTech will be indispensable for all financial institutions going forward.”
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