OCTOBER 20188IN MY OPINIONIt's been estimated that regulatory compliance costs more than $70B annually worldwide for financial services firms. Historically, compliance has been manual-intensive and burdened by old systems and processes at even the large and established financial companies. RegTech, a catch-all term denoting the use of the latest technologies and analytic science to better manage issues around KYC/AML, identity management, fraud detection, cybersecurity and other areas holds transformative potential within compliance, governance and regulatory reporting. Bloomberg estimates that global demand for RegTech will be nearly $120B by 2020. Many dozens of technology startups have come up in various parts of the world to avail of this growth.Yet the field of RegTech is beset by challenges, both for incumbents and startups. Incumbents are faced with a fragmented and largely untested set of options from solution providers whose own stability may be in doubt, and constrained by their own legacy infrastructure. How are incumbents to adapt quickly, smoothly and inexpensively to RegTech? The challenges for a startup are equally daunting: the sales cycle is long and uncertain and subsequent integration is bespoke. All the while, technology and data science investments are incurred upfront, so the vendor could run out of money before it can scale. It is no surprise to see By Venkatesh Bala, Chief Risk Officer, Biz2CreditRegTech: What will it Take to Succeed?Venkatesh Bala
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