Summary
What this article covers in 30 seconds
- RegTech selection should involve risk, operations, sales and marketing representatives.
- Firms should look beyond familiar vendors and remain open to different approaches.
- Adaptability and proof of value are central before committing significant investment.
Whether it be the cost of compliance monitoring, too many complaints or cumbersome reporting procedures, every firm has its own specific pain points. Finding a RegTech solution that is able to address your key issues while providing additional cross-departmental value will free up significant time and resources, and ultimately deliver a higher return on investment.
With the RegTech market expanding, Recordsure’s Jonathan Drechsler outlines his top tips for focusing the search and finding the best RegTech providers for a business.
Involve a cross-section of people
The benefits of a RegTech solution are likely to be wider than expected. Solutions initially sought to solve compliance and regulation problems may also help other business areas. Sales, marketing and distribution teams can often use RegTech to drive efficiencies in back-office systems, streamline the customer journey and derive greater insight from the customer experience.
Ensuring representatives from risk, operations, sales and marketing are involved can help the chosen solution deliver benefits across the whole company.
Look beyond the established market
FinTech and RegTech are about digital disruption. Seeking technology to reduce costs and improve efficiency is unlikely to succeed if firms speak only to the same companies or use an outdated approach. Newer vendors may bring a different view of business objectives and pain points.
Approach your search with an open mind
As well as considering market disruptors, firms should avoid relying only on a predefined checklist of desired functionality and invite vendors to demonstrate product capabilities. They may find functionality they did not know existed. It is also worth speaking to counterparts and competitors to gauge the market and understand what works for others.
Be brave
Try new technologies, remain open to different approaches and don’t be afraid to fail. Keep testing technologies to discover what works, then commit adequate financial resources to the one that does.
Ensure adaptability
History and burdensome legacy systems show that technology needs to adapt to changing regulation, technological advances and evolving business needs. Firms should seek continuous improvement from vendors so the product maintains its viability throughout the contract term.
Newer, smaller RegTech providers may be able to move faster than larger providers. Off-the-shelf products from larger providers are convenient, but there is often an assumption that the technology is fit for purpose and will remain so. Smaller, more agile providers are likely to work in partnership to customise and adapt solutions over time.
Prove its worth
This is the most important part of the process. Firms should have a clear set of efficiencies that each vendor needs to demonstrate, then create a focused proof of concept around a ring-fenced area of the organisation, building in early and frequent test points to ensure key requirements are met.
Only then can firms start to build a solid business case before committing to significant investment. Choosing a RegTech solution that is adequate now and in the future can be challenging.
Recordsure had also been recognised in the RegTech 100, a listing of the “world’s most innovative providers of technology solutions that address the challenges and opportunities of dealing with regulatory issues.”
Frequently asked questions
Involve a cross-section of people from risk, operations, sales and marketing.
A focused proof of concept helps test efficiencies and build a business case before significant investment.