In this video, Susannah Hammond, senior regulatory intelligence expert at Thomson Reuters, discusses the recently-released FinTech, RegTech and the Role of Compliance Report 2020. The Report highlights the benefits FinTech and RegTech solutions, including increased operational efficiencies and effectiveness, improved consumer services and enhanced business opportunities. The key findings of the Report are:
- FinTech, RegTech and InsurTech approaches are increasingly being employed into financial institutions’ risk and compliance functions. In fact, 65% of financial institutions contacted within the scope of this Report’s development indicated such, up from 59% last year).
- Opinion on technological innovation and digital disruption has fluctuated in the past couple of years. Following a slight drop in 2018, there was an overall increase in positivity regarding FinTech innovation and digital disruption (from 74% in 2018 to 83% last year). This, however, varies by region, with European financial institutions expressing the highest level (97%) of positivity.
- Positivity about RegTech innovation and digital disruption has demonstrated a similar trend, rising from 71% in 2018 to 77% last year.
- Many financial institutions have reported making a significant investment in specialist skills for both risk and compliance functions as well as at the board level. In fact, 21% reported investing in and/or appointing those with specialist skills to better accommodate FinTech, RegTech and InsurTech solutions, up from just 2% last year.
- The 3 greatest challenges financial institutions expect to face in the coming year are: (1) keeping up with exponentially-improving technological advancements, (2) working with budgetary limitations (i.e. lack of investments coupled with high costs) and (3) maintaining strong data security. The 3 greatest challenges identified last year by financial institutions were: (1) upgrading legacy systems and processes, (2) working with budgetary limitations and (3) having adequate access to skilled resources.
- RegTech solutions are becoming more common, with 14% of financial institutions stating that they have implemented at least one such solution (up from 9% last year).
- Financial institutions that have yet to implement FinTech and/or RegTech solutions have not done so for a number of reasons. The top reasons include a lack of investment, a lack of access to skilled personnel (especially inhouse personnel) and information security/data protection concerns. Interestingly, 14% of those that have yet to implement any such solution reported that they have taken a deliberate strategic decision to not do so at this time.
- 38% of financial institutions reported that they expect their budget for RegTech to grow in the coming year, while 31% reported a lack of budgetary support for RegTech (up from 25% last year).
To view the Report in its entirety, click here.