The Accelerating Impact of Regtech 

Working with developers of FinTech solutions, as well as investors and financiers, Ashurst's financial services team is committed to bringing innovative solutions to life to meet our client's evolving needs. The financial services team works closely with the firm's newest initiative, Ashurst Digital Ventures, which supports the development of digital products for our clients. Ashurst Digital Ventures leverages the latest technologies to incubate and accelerate digital product ideas through to commercialisation.

Ashurst has partnered with Anthony Stevens, a leader in digital strategy and software development, to produce the first instalment of a thought leadership series which explores the trends and impacts of regulatory compliance technology solutions and legal technology in the financial services industry.

The Accelerating Impact of Regtech

Since the global financial crisis, there has been a barrage of new regulation. In fact, more than 50,000 new regulations have been released since - that’s a new regulatory alert every 7 minutes. To stay compliant, banks alone are now spending hundreds of billions of dollars annually.

However, it isn’t just the financial industry that has been inundated by new regulation; it’s every industry. In our hyper-connected economy, regulators are taking a hard line to ensure customers, and their data are protected, with Europe leading the charge with their General Data Protection Regulation (GDPR), many other countries and states are now following suit.

Given the current state of regulation, companies are already struggling to ensure they are compliant and there is no sign of things slowing. As new digital-first companies enter the market, and older incumbents transform, regulators will continue to prioritise the safety of customers they are entrusted to protect, meaning the complexity and challenges associated with compliance are only set to grow. 

This is a significant issue for many companies as most take a manual and reactive approach to regulatory compliance, which is already very costly and slow, meaning that the cost of compliance will only increase if companies are to maintain the status quo. 

These forces have led to the dramatic rise in regulatory compliance technology solutions, commonly known as regtech. In 2019, there are a range of startups that sit under the regtech banner, focusing on different use cases and implementing different workflows and technologies, including cloud services, big data and analytics, artificial intelligence, machine learning and blockchain. 

At their core, regtech solutions are designed to automate and decrease the cost associated with regulatory compliance, these range from simple yet effective solutions that automate workflows, to the high computational that proactively analyse and monitor large data sets for risks and incidents, with ability to report and even automatically react in real-time to ensure on-going compliance. regtech solutions also have the power to improve customer experiences and increase revenue through automating and streamlining processes like AML and KYC.  

What is Regtech?

Although a relatively new term, Regtech now commonly describes technology that facilitates the delivery or compliance requirements, including:

• New and existing rules;
• Regulations;
• Sanctions; and
• Industry-specific guidance as prescribed by the respective regulatory body.

In most cases, regulatory bodies are industry specific.  However, they can also include governments, councils, standards bodies or agencies.  

The innovation and application of technology in Regtech can be grouped into 4 areas:

• Traditional compliance,
• Risk management, 
• Financial crime, and
• Identity management.

Related to these areas are data reporting, filings and predictive analytics.

jamie ng, ashurst

Sydney-based partner Jamie Ng is global head of finance, funds and restructuring and has over 15 years' experience in complex structured finance and derivatives transactions. Jamie has played a lead role in driving the firm's innovation agenda having introduced initiatives such as Ashurst's continuous legal process improvement framework known as "P90" as well as , as Co-CEO, Ashurst Digital Ventures, our digital product development business. Jamie has advised on some of the most complex, innovative and first-to-market transactions including DLT based capital markets transactions.

ANTHONY STEVENS, DIGITAL ASSET VENTURES

Anthony Stevens is the founder and CEO of Digital Asset Ventures (DAV). The co-founder of several start-ups, including cloud-based B2B commerce platform Devicedesk and regulatory compliance and third-party risk management platform 6clicks.io, Anthony was also former Partner and Chief Digital Officer at KPMG. In 2018, he published his first book, Chasing Digital: A Playbook for the New Economy, a comprehensive step-by-step guide to digital transformation, aimed at the leaders of pre-digital companies.