June 6, 2018
Large US and European banks are spending $20 billion a year on technology to help them comply with newly evolving regulations such as MiFID and PSD2. With regulatory environments becoming increasingly complex, 300+ million pages of regulatory documents will be published by 2020 & 600+ legislative initiatives need to be cataloged by a medium-sized, sell-side institution to have a holistic view of their rulebook – the silos of data generated by various business functions lead to significant resource expenditures on data collection, organization, and analysis.
Moreover, between 2008 and 2016, there has been a 500% increase in regulatory changes in developed markets, which has led to 10-15% of the total workforce of FIs working under compliance functions.
Meanwhile, an end-to-end RegTech implementation promises 634% in ROI realizable over a three-year period, which is why a range of financial institutions in Europe are actively exploring partnership opportunities with startups across the use cases we will be reviewing further.
The RegTech adoption strategy differs across various tiers of financial institutions. Some of the large tier-1 institutions have the tendency to take small steps in understanding the ecosystem. They do not often like to go and have strategic relationships with a number of vendors. The mid-tier organizations have a tendency to get into a working relationship with the RegTech providers and then work with their product. Some medium-to-small scale FIs that are always looking out for new innovations and new ways of working, might go straight ahead and implement a vendor’s solution. – Subas Roy, Global Chairman, International RegTech Association (IRTA), for MEDICI’s new