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Regtech focus: key takeaways of 2017

We think that 2018 will be a big year for regtech. That is why we are bringing this year to a close with a detailed and in-depth analysis of the industry: trends, predictions, news and industry insights. Here is a summary of what we have learnt from our first RegTech Focus.

As mentioned in our RegTech Essentials, the industry has great potential in Europe due to PSD2, MiFIDII and GDPR and as a result of Brexit for multi-jurisdictional compliance. Global value chains require compliance across varying legal systems. Regtech innovators help their clients by ensuring multi-jurisdictional compliance and by developing close relationships with regulators across the globe, as Simon Wilkinson for Tradle pointed out.

Important to our research, we gathered industry insights from Holland Fintech members at Tradle, AxonIQ and Informer. Common to all interviews was the prediction for strong growth in 2018 and the importance of a global approach to regtech. In addition, technical developments will spur innovation whether in blockchain for KYC, event sourcing software for compliance or data analytics for improved online accounting. Sophie Gibaud, Fidor Bank’s Vice President of European Expansion in Regtech, said that RegTech will come into its own in 2018 thanks to blockchain. 

Regtech in Europe can be concentrated in London. We think that 2018 will reveal what the continent has been developing in regtech for the EU’s new regulations and directive. The U.K. has been a leader with the FCA’s regulatory sandbox and their open banking rules. As the U.K. continues to drift away from the continent in terms of regulations, there is great opportunity in Europe.

Moving forward, regtech needs to become more scalable. This is one development we predict for 2018: regtech startups will mature and expand their services to be compatible solutions for larger financial institutions. The global nature of the industry has been repeatedly emphasised and international banks need proven, scalable solutions. Furthermore, everyone needs regtech solutions which can be integrated into the company’s digital framework. This point was highlighted by both Reetu Khosla, the Senior Director of Risk, Compliance, and Onboarding at Pegasystems and Frans van Buul from Amsterdam-based software and regtech AxonIQ in articles posted this week.

In 2018, we predict that regtech development will include further simplification of KYC customer on-boarding, improved management of regulatory change and broader use risk modelling involving big data analytics. 

Overall, we learnt that regtech is an important space to watch for 2018. This year has seen regtech develop from humble origins. Next year will likely see bigger players emerge and more integrated software emerge as technology develops and new possibilities are introduced. Keep watching Holland FinTech for more regtech news next year.

By Grace Appleford, Research Analyst for Holland FinTech.


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