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What does it mean to be ‘regulator ready?’

By Cheri Burns | Thu 29 October, 2020
Encompass podcast RegTech 20:20 now live | Encompass blog

In the latest episode of the RegTech 20:20 podcast, guest speakers Samantha Sheen, financial crime expert, and Daniel Gozman, Director of Engaged Research, The University of Sydney, delve into what it means to be ‘regulator ready’ in the rapidly evolving RegTech landscape.

Samantha, who hosts her own podcast series, Captivated Audience, provides expert insight throughout and starts by mentioning that:

RegTech providers seem to invest a lot of time to properly understand both the operational and regulatory landscape in which their client or customer operates”, suggesting that they are focusing more energy on becoming ‘regulator ready’ now than ever before.

Samantha shares her belief that being regulated takes a lot of weight from financial institutions, however, does point out that they need to then do testing, reporting and independent reviews, which may be time consuming. She thinks that being regulated is a “great selling point for regulators”, but warns RegTech providers to be mindful that:

It is a great deal of work, including setting up a regulatory framework, training staff and figure out what they are assessing the RegTech on… and how do you achieve all that without stifling innovation?

Daniel Gozman is Director of Engaged Research and a senior lecturer at the Sydney Business School. In this  role, he helps to facilitate impactful research between academics and the industry, as well as undertaking his own research around the intersection between innovation, emerging technologies, and policy risk compliance.

In the podcast, Daniel acknowledges that, around the world, regulators are very clear that it’s the regulated firm that remains responsible for its processes and systems, rather than a provider.

When they are relying on these technologies, they’re taking a leap of faith because they are relying on these technologies to perform well within their organizations – if these do not perform then it’s the regulated firm that has to answer to the regulator and not the firm directly

Another focus of the discussion is the fact that compliance has evolved considerably over the last 10 years, with increased rigour and restriction. Regulations have become increasingly stringent and regulators are demanding that audits go deeper, both of which have resulted in demands for compliance officers to show them every aspect of policy implementation.

At the same time, we are all in the age of big data and this includes the compliance function. Compliance systems must offer complete traceability and include analytics that provides regulators with access and inspection rights.

What the views of the guests tell us is that future compliance systems will require an unprecedented level of transparency and analytical insight, and RegTech providers must keep up with the evolution and be ready to adapt accordingly.

Listen to the episode.


Author: Cheri Burns
LinkedIn Profile | Cheri Burns

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