Chris O’Driscoll, head of disruptive change at PA Consulting Group, believes that it is important for RegTech that there is a collaborative system between banks, insurers, asset managers, regulators, tech firms, consultants, accelerators and academics. Although this is starting to happen, O’Driscoll says that more can be done to foster this environment. For example, financial institutions and tech companies often complain about a lack of regulatory guidance. Also, some tech companies struggle to accurately represent themselves and their capabilities to large financial services providers, which tend to be wary about investing in unproven technologies.
Although O’Driscoll is a proponent of collaboration, he also acknowledges the important role of competition in two main directions: (1) competition among peers to gain customers and (2) competition between older, traditional firms and newer platforms. In cases of the latter, traditional firms need to work fast and either find a way to collaborate or risk being squeezed out of the market. For example, if firms like Google, Facebook or Amazon enter into financial services, what will banks and insurers do?
In the end, O’Driscoll is clear: firms need to be bold in their approach. Although it can be hard, especially for more traditional firms, to justify changes and go with something unproven, current approaches are just not sustainable. Innovation is happening. The key is in understanding the players which can help make better decisions and see beyond a direct return on investment to longer-term benefits.