Core Principles To Consider When Implementing Regtech

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Core Principles To Consider When Implementing Regtech

Regtech adoption in the financial sector continues to grow with the global Regtech market expected to grow from $4.3 billion in 2018 to $12.3 billion by 2023. This is no surprise to those of you operating in the financial sector who are bombarded with a growing number of financial regulations. In fact, it is estimated that over 300 million pages of regulatory documents will be published by 2020 and over 600 legislative initiatives need to be catalogued by a single medium sized financial institution.

Many organisations are now turning to Regtech providers to help them reduce the burden of regulation and the manual nature of collecting and collating regulatory data. With Regtech adoption on the rise this post will examine the “Core Principles To Consider When Implementing Regtech”.

Core Principles To Consider When Implementing Regtech

1. Think Big – Start Small – It can often be the case that organisations can rush into a large scale implementation of a Regtech platform after being swept away by a demonstration of all of the functionality and modules a Regtech platform can offer. A risk factor to this approach is that down the line the implementation could fail or the organisation finds that the product isn’t actually suitable for their requirements.

What we recommend to mitigate this risk is to “think big” in terms of the grand plan of automating all areas and functions in the business but to “start small” by starting with one area of the business, whether it be risk, compliance, vendor management etc. The goal with this method is to get the Regtech solution in the door, get everyone comfortable with it and expand from there. This leads us on to our second recommendation of using a modular approach to Regtech.

2. A Modular Approach – A modular approach gives organisations the ability to achieve something quickly, to fix one pressure point that the they might have. If you have selected the right Regtech provider than the solution can successfully solve the first issue within the organisation, in turn building confidence in the system’s ability to solve future problems.

On the other hand if you have selected an unsuitable provider it will become apparent quickly and the organisation can cut ties from a modular based contract easier than they would have with an enterprise wide solution.

3. Future Proof The Technology – It is critical that an organisation can future proof the technology. The landscape is changing rapidly in both the regulatory side and the technology side. It is crucial to select a Regtech provider that understands what is happening in the technology world and that knows the latest security requirements such as GDPR. As requirements change the organisation needs to ensure that their Regtech provider is aware of and can quickly adapt to these changes.

4. Agile & Dynamic – Considering the regulatory and technology changes mentioned in the last section it is important to ensure that the Regtech provider you are considering is agile and dynamic. The last thing an organisation needs is a technology platform that cannot adapt to change or that is rigid. Regtech solutions need to move with the business and quickly be able to account for new risks, new regulations and changes to existing structures as needed. These changes should be easy to make on the software and organisations should be equipped with the skills needed to make these changes themselves on the software.

5. Keep It Simple – Simplicity is key. If you can have a piece of technology that is easy to implement, can be implemented quickly and fit all of the above points than you are on the road to having a successful relationship with your Regtech platform.

In conclusion it is key that an organisation has a grand plan in place in terms of Regtech adoption but in order to get buy in across the organisation it is important to start by solving one pain point and build from there. It is important to select a Regtech provider that has a good track record and can proven that they can adapt and change over time as regulations and organisations change. Most importantly we recommend that keeping it simple is the best way of successfully implementing a Regtech platform.

Thinking Of Implementing A Regtech Solution?

Book a demo today and see why ViClarity has been successfully implemented hundreds of times across multiple sectors in multiple countries. Contact neil.osullivan@viclarity.com today to book a product demonstration.

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