On Wednesday 22nd January Shield played host to the latest RegTech Women event in London entitled: ‘Mind the gap: Building a successful financial firm / RegTech Partnership’. The attendees enjoyed an evening of lively and enlightening discussion accompanied by pizza and (to reflect Shield’s roots) delicious Israeli beer and wine.
The event featured a panel of various members from across the RegTech Women community including representatives from a corporate law firm, financial services, a tier-one bank, a consultancy and myself <Shira Rottner> representing RegTech technology vendors.
The debate began with the suggestion that RegTech adoption is not as advanced as it could be, and the panel was asked what challenges they see to improving this. The panel members discussed a number of potential issues including how newer/ less experienced RegTech providers may struggle to deal with large financial institutions, the importance of finding the right champion within a potential customer business, establishing trust in the working relationship and the need to convince many different teams within a business that the solution works and will benefit them.
There was also a suggestion that small providers can appear to be a potential risk for large financial institutions, including their ability to scale solutions effectively. The group agreed that setting expectations and being open and honest is equally important to a successful RegTech project as winning the contract.
The panel also examined some of the wider RegTech industry needs and the best approaches to meet these. Suggestions included thoroughly researching and understanding a prospective financial institution client, ensuring robust legal safeguards and a clear understanding are in place from the start and once the client is on board, maintaining an ongoing relationship with the stakeholders (including hosting roundtables and user groups).
Turning the focus towards the financial institutions themselves, the panel also discussed was how these businesses can help RegTech providers as well. It was suggested that financial institutions could be more upfront about requirements and the expected timescales – with clear communication from day one. The women also concurred that it can be beneficial for all concerned if specialist RegTech providers can work with other providers to provide a full end-to-end solution and ecosystem of cooperation.
Following the main discussion, it was time from questions from the floor. The first question asked was around who pays for proof of concept (POC) projects – which generated debate and it was suggested that it would depend on the scope of the project and whether the financial institution was likely to adopt the system.
A second question on ‘Build Vs Buy’ centered on the possible conflicts between internal IT teams wanting to develop in-house solutions as opposed to buying in from specialist vendors. The panel suggested that many IT teams are coming around to the idea of buying specialist systems to avoid time constraints and the expensive consequences of spiraling costs that can blight internal projects.
To finish the session, an audience participant asked the panel whether it is wise to seek collaboration between vendors that provide different elements and how this can be encouraged. It was suggested that many RegTech players already collaborate where appropriate and that financial institutions are getting braver about using this approach. It was also concluded that it is important to have this willingness to work together on key projects to offer the best solutions.