“RegTech”! Everyone seems to be talking about it and as a compliance professional, you must probably be wondering what all the hype is about. Well it’s no wonder because in recent years, RegTech has become more prevalent as technology vendors rush in to seize opportunities to develop solutions that helps improve productivity and risk management while driving the cost of compliance down. This includes offerings in compliance reporting, regulatory change management, cybersecurity, anti-money laundering or general compliance management. In fact, things are going so well that some estimate that the RegTech market size will be worth up to $55.28 billion by 2025.
Now, we meet and work with compliance professionals every week and while we know that most folks would love to get their hands on some of these solutions, they also don’t necessarily have enough time, opportunity or support to seriously evaluate these solutions. This is why we decided to help by giving dating advice for all the RegTech newbies out there.
This happens more frequently than most people would like to admit as most folks are in fact playing catch-up when they would rather prefer to managing this proactively. The problem gets compounded when you have to track developments across different jurisdictions, for different business lines and products.
Once you feel you have a good grasp of the RegTech scene, it’s time to internalise those lessons and examine how they can be applied in your unique situation. What are some of your biggest problems that you think these solutions can help alleviate? Start by looking at your processes that take too much time, money and effort and make a list of these and then start building out potential use cases. From these, generate some consensus on which should be prioritized and start with those.
Great! So now you know the scene and you know what you want. Now it’s time to figure out who you want. This is where you define the criteria you want your vendors to fulfil. This could consist of all the things you think an ideal partner should have which could include the ability to fulfil your stated use cases, a credible background and track record, reasonable pricing and general availability. At this stage, you should also be determining what kind of budget you will have available for this initiative. This will clarify the type of vendors you can work with (and afford) and prevent any roadblocks later in the process.
You’re off to a great start but this is when the hard work begins and guess what: you already have a full-time job. This is why it's important to appoint a point person (or persons) to help drive this process to a successful outcome. This person can play a key role in each (or all) of the steps mentioned here and will quite literally function as a matchmaker by participating in the vendor identification and selection process, arranging meetings and demonstrations, coordinating efforts between your team members and vendors and much more. It’d be better to find your matchmaker sooner rather than later.
Depending on the size of your organization, there could be one or multiple stakeholders that need to be convinced of the value of a proposed solution before things are actually finalized. Getting these stakeholders involved too late in the process means a higher expenditure of time and effort for everyone involved which then delays the realisation of the value you had hoped to achieve. Most companies tend to trip up here. See how you can work with the powers that be to streamline the process to work with external vendors who offer great promise in improving efficiencies internally. After all, if your company is committed to improving overall efficiency, it only makes sense to start by trimming the red-tape.
Once you know what you want, why you want it and who you want to work with - it’s time to reach out to potential vendors and start running pilots or trials to assess how well they fulfill your stated use cases and if the anticipated value is being realised. To ensure a successful outcome, be sure to agree early with your vendors on just what those success metrics are and should be and use that to judge whether things should progress or not.
Once you’ve run your pilots and tried out different solutions from different solutions and evaluated them based on their merits (and price-points), make a call who you’d like to strike up a partnership with, propose your terms, make your vows (think: sales contract) and then run with it.
Like all great relationships, you have to keep working at it to ensure that you get the most out of this partnership. This means giving feedback , raising issues early on, asking for help when you need it and continuing to collaborate with yours vendors to help improve the overall solution and experience.
There you have it - this should really help get you started on your journey to adopting RegTech solutions. If you would like to chat to someone to figure out how to get started on your journey, then drop us a line!