January 13, 2017
In my role as organizer and chair of RegTech London, during 2017, I will be interviewing several #RegTech CEOs to further understand, what problem they are solving and how. In this episode (1), I interviewed PJ Di Giammarino.
Q: Can you explain your role?
PJ: For the past decade, I have served as Founder and CEO of JWG Group, a think-tank based in London which is recognized globally by regulators, financial institutions and technology firms. Having been based in Europe for 20 years and London for 15, my team of independent analysts helps senior executives within public and private sectors determine how regulations can be implemented in the right way.
Q: The UK government has recognized #RegTech as a real thing. Can you help me understand how big a problem is regulation to the financial services?
PJ: The existing RegTech market is huge – at approximately £15 billion per annum or 0.7% of UK GDP, it holds more value than the UK agricultural sector. Given the scores of regulatory programs, thousands of firms and hundreds of suppliers in the marketplace, this could well be a conservative estimate.
Q: How exactly are companies trying to deal with the problem today?
PJ: The root cause for spending at such a high level is that, far too often, the ‘tech’ answer is a reactive and costly tweak to an antiquated system – for example, a last-minute spreadsheet fix or a tweak to the COBOL code that was designed to work with shillings and pence. Despite the promise of new technologies, these are often slow to be coded to the specifications required and, therefore, it appears easier to spend professional services fees of £600 to £10,000 per day than to look hard for a better solution.
The size of this spend demonstrates that there is clearly enough funding to be able to incentivize both small and large technology players to invest in solutions that will serve both the market and the consumer in better and safer ways. The question, therefore, is how to build a modern digital ‘RegTech commons’ that puts the conditions for technological success in place.
Q: How is technology changing this approach and can you give any real example of the benefits?
PJ: Tom Groenfeldt wrote a good article on Forbes that I contributed to (December 1, 2016). You only need to look at some of the examples that came out of the FCA tech sprint last year. One example of converting the FCA Handbook into machine-readable text and using this to enable automated advice is an obvious but good one to show how companies may monitor, act on regulatory change without hiring armies of people.
Q: What specifically is your company doing to help the regulatory impact of financial services?
PJ: We do this in three things. Firstly, we track the totality of the FS reform across the globe in order to educate the market via our publications, events and training programs. In parallel, we run collaborative special interest groups to crowdsource the impact from legal, compliance and operational perspectives. Finally, we offer the world’s first regulatory change management platform, RegDelta.