These demands have absorbed much of the effort and resources of the sector, and monopolised change and IT spend due to the need to implement and adapt to new regulations.
These stretching demands have been and continue to be similar for all banks. Even though banks have used the Joint Money Laundering Steering Group’s (JMLSG) steer and the Wolsfberg Principles guidance to create an industry standard, banks acknowledge that they have not been sufficiently lean or agile in this regard. This has mainly been due to the large number of fronts on which they have had to work simultaneously.
After the regulatory ‘tsunami’ of recent years, banks now know the calendar of new regulatory demands up until 2019, when they will have to adapt their platforms to the next milestones. These are linked to the implementation of MIFID II, IFRS (IASB), FATCA, CRS and AML Directive IV. They have already begun to plan how they should be organised to improve their efficiency in the monitoring, definition and implementation of the various measures that were approved by supervisors in economic and political regions, and then adapted to each local market.
RegTech, the name given to the FinTech firms focused on the application of new technologies in the field of regulation, can play a key role here. RegTech solutions will not only provide innovation and answers to existing problems but they will also improve efficiency and standardisation in the short term, with the adaptation of mandatory regulations for all financial entities. They will do this by taking advantage of synergies and by applying the agility and scale of new technologies to solve regulatory challenges. We see key developments here in the areas of regulatory reporting, use of industry data sources, ability to store and extract huge quantities of data (utilities), and monitoring of compliance to regulations to assure conduct is in line with commitments.
Jorge Montana, Manager at Axis Corporate.