Archive for October, 2017

Speaker interview: John Byrne

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John Byrne, CEO at Corlytics

A year or so after ‘RegTech’ became a buzz word in financial services, what are the key enablers and barriers to its adoption?

Although RegTech has only just become a buzz word, financial institutions are long used to using regulatory technology. The difference with the current buzz around RegTech is the opportunities that regulated firms and regulators perceive RegTech to bring.
The key enablers to RegTech are the myriad of problems that organisations face with overwhelming regulatory complexity and uneven, overlapping regulatory timeframes. Regulated firms need help with making the complex simple. Also, the gap between regulatory intent of regulators and interpretation of these regulations provides an opportunity for providers to bridge the gap.
The key barriers to adoption of RegTech are multi-fold. Firstly, there is a lot of noise in the market which makes the buying process for regulated firms difficult. Many RegTech vendors, even though they have a good idea, do not properly understand the problems faced by regulated firms. Long sales cycles and procurement processes mean that RegTech firms needs to be focussed and funded or risk going out of business before their technology is adopted.

How should RegTech providers, FIs and regulators be working together to create holistic solutions? How can collaboration programs work, in practice.

RegTech providers, FIs and regulators should be working together to make regulatory intent – the actual regulations – clear, understandable and implementable, so that they are properly interpreted.
At Corlytics, we use our multi-layered regulatory taxonomy in the major global regulators to create intelligent handbooks that are fully taxonomised. We also extract intelligence from regulatory enforcements, enabling financial institutions to understand at a regulatory category, product/service line, regulator, jurisdiction and control level why enforcements are levied on a global basis.
This means that we can accurately map regulatory intent from handbooks right through to interpretation failings so that FIs can address these failings.
This collaborative process means that we can work on better regulatory outcomes for everyone.
The MiFID II / MiFIR implementing legislative acts require a significant number of actors – located within as well as outside of the EU – to obtain an LEI that are under no such obligation to date.

Which regulations are stopping innovative products and services from being brought to market? How can RegTech help firms to overcome this?

I don’t look at regulations as being a barrier to innovation. Quite the opposite, I believe that regulations are put in place to try to protect consumers, customers, the financial services system and ultimately global economies. To this end, RegTech firms can help organisations to drive down the ever-escalating cost of regulatory compliance – we know it’s on the increase year on year. Not only that, by accurately measuring regulatory risk, RegTech firms like Corlytics can help organisations to impact the bottom line by moving regulatory and legal provisions from the balance sheet back into the business to be invested in core products and services.
RegTech can provide a competitive advantage to FIs who properly embrace the capabilities it brings.

Which key regulatory compliance challenges would you most like to see being tackled by RegTech providers?

The biggest challenges that I would like to see RegTech providers help solve are as follows:
  • Measuring Regulatory Risk using a data driven approach. Current approaches to measuring regulatory risk do not provide the same rigour as monitoring market risk or credit risk. FIs need help with using a data driven approach to properly understanding their exposure
  • Enable FIs to more easily understand regulatory obligations across the
  • Provide a mechanism for collaboration between regulators and financial institutions.

What are the most important characteristics you look for in a new RegTech solution?

A new RegTech solution must tackle a real problem that exists within a financial institution, that is either impossible or difficult to solve. Ideally, a RegTech vendor should validate the solution with someone who has experienced the pain of regulatory compliance (e.g. a Chief Compliance Officer etc).
It must provide an immediate impact to the customer, preferably in terms of ROI. It must be simple to use, loved by its customers and be capable of being used immediately after purchase (not waiting 2 years for a roadmap to deliver).
As with all solutions, there must be a set of customers that are willing to pay for the new RegTech solution.

Why will you be speaking at ECN’s RegTech Summit US, and what do you hope to get out of the event

There are a lot of RegTech vendors in the market. There are a lot of RegTech events to attend.
ECN’s RegTech Summit US has a reputation for delivering quality insights – providing regulators, FIs and RegTech vendors with an ability to cut through the noise in the market. I am honoured to be part of that conversation.
From this event, I hope to connect with and hear from like-minded individuals and organisations who see the value that RegTech can bring to Financial Services industry.

Speaker interview: Victor Dorado

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Victor Dorado, Head of Legal, Santander

What are the 3 biggest challenges for in-house teams in FS firms today?

Although it is quite difficult to highlight only 3 challenges, I believe in-house teams have to work quite hard on: (i) providing proper legal support on the business transformation of financial entities, (ii) thinking globally when providing local legal advice, and (iii) looking for more efficient ways to work using available technology.

What key steps can legal teams take, to create a higher value proposition for the business and for customers?

In-house lawyers are a key element in creating business value, and as such, the most essential step we can take is to better understand the business’ needs. By opening up this communication, we can more effectively protect our companies from legal risks.

What hurdles do legal teams face, in terms of implementing and delivering value from new technology solutions? How can these be overcome?

The main hurdle to technology implementation is our own professional experience. We have learnt to carry out our jobs in a specific way: by reading manuals, laws, regulations, etc., all bound in paper. It should not be a major challenge to implement professionally what we have already changed in our personal life, i.e. using technology every day for reading newspapers, watching television, communicating on social media, and many other things. Technology solutions will only enhance the value provided by in-house lawyers, and will allow for greater efficiency by delivering better and more agile legal services.

How do you view the current level of interaction / collaboration between in-house teams across the FS industry, and how could this develop in the future?

In my experience, I see a productive level of interaction between in-house legal teams today, thanks to solutions already implemented. We are now doing things that, just few years ago, were absolutely impossible to do. There are many tools already in place effectively working for the FS industry, making it quite easy to interact and collaborate with other in-house teams.

Which pain points for in-house teams most lend themselves to automation, and which pain points will be the most difficult for technology to fix?

In my view, some tasks, such as taking minutes of a meeting or filing physical legal documentation, are pain points technology is already able to solve. Tasks requiring human understanding and engagement with facts are still too far advanced for technology to automate.

Why will you be speaking at Finance Edge’s Next Generation In-House Summit, and what do you hope to get out of the event?

I will be speaking at the summit because I believe we are living in a remarkable time for in-house lawyers – especially for those who work in the financial industry. No one knows where all these new solutions will take us, or how the industry will evolve in five years, but participating in such an interesting event like this one will allow me to exchange opinions and thoughts with other colleagues that have to face similar challenges.

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