delivering the IRTA panel discussion: "The Rise of RegTech"
encognize joins the 19th Annual Japan International Banking & Securities System Forum 2018 (19th JIBSIS 2018) organized by Jtb Communication Design and help educate on global RegTech trends. Bruno Abrioux-Takano, encognize GK Founder & CEO and Japan representative of the International RegTech Association (IRTA), was invited to organize and deliver for the IRTA a panel discussion titled "How can Technology Help Address Global Regulatory Reforms: the Rise of RegTech" featuring the following panelists:
picture courtesy of Goodway
During the panel discussions, topics such as RegTech Innovation trends, RegTech adoption challenges as well as the possible use case of RegTech for Regulators were debated. A few noteworthy highlights from the panel included the importance of collaboration between the ecosystem participants: financial institutions, regulators, technology innovators in order to find common objectives. While RegTech is often seen as a solution for financial institutions to comply more quickly, more efficiently and at lower costs with changing regulations, the panelists also emphasized that Regulators themselves could potentially benefit from RegTech to help address their own supervisory needs. According to the panelists, this SupTech (Supervisory Technology) trend for Regulators will achieve its full benefit only if all parties' interests are being discussed and considered.
When asked about RegTech innovation and adoption challenges, the clear need to build trust between RegTech innovators and Financial Institutions was mentioned. This requires to develop means for both parties to safely explore together solutions to existing GRC challenges. Additionally, the importance of improving and adopting global standards (reference data, reporting standards...), frameworks and protocols was definitely considered as a key parameter to increase both RegTech innovation and adoption. At last but not least, the data challenge was raised as one of the key challenges for RegTech adoption. From cybersecurity concerns when adopting new solutions from emerging RegTech providers to data authenticity and data provenance concerns, to data quality issues when using advanced data analytics or machine learning based services (Garbage In Garbage Out risk), the question of data governance came at the heart of the discussion. According to the panelists here, there is no magic solution: deploying RegTech solutions cannot be an opportunistic short-term decision; it should be part of an overall digital transformation strategy of the GRC function whereby Financial Institutions should first define what they want to address, then consider the data strategy to solve their identified challenges and only then look for the appropriate technologies and solutions.
Finally, when questioned about the RegTech innovations that have the most chances of success in the long-term, some of the panelists commented that solutions that cannot only improve the GRC function but can also unveil new business opportunities have definitely a higher probability to get attention from the Financial Institutions. (Example of client risk profiling solutions used to improve the institution risk function and, at the same time, allowing to better target clients with appropriate offers is one of them).
Panel Discussion was concluded on the need to share and educate further on RegTech trends and global initiatives so that the Japan Financial Services Industry can also fully benefit from this emerging trend.