Capital Markets RegTech Buzz

b-hive-londonThe RegTech buzz continues and has propelled us further and higher in the league tables!

Percentile was invited to present to a number of institutions at the BNY Mellon EMEA Innovation centre courtesy of B-Hive, a well thought out agenda and good debate followed on the operational challenges faced by a diverse set of financial services firms.

 

The highlight from last week would have to be the PRMIA London Chapter’s event on ‘Banks moving to the cloud’, which was hosted by Google. The talk focused on the use of cloud technologies by financial institutions and perspective on the new range of regulatory and technology risks associated with adoption of cloud.

 

LHoFT

Finally, we were in Luxembourg to pitch at LHoFT (Luxembourg House of Financial Technology), which is soon to be inaugurated. Attended by senior folks from the Luxembourg financial services industry along with other international Reg/Fintechs.

 

To summarise the last fortnight’s innovation findings:

  • It is good to see that there is a profound impact on thinking as it relates to Capital Markets Risk, which has traditionally been a proprietary platform within firms. There seems to be a growing appreciation of external innovation to reduce cost and time-to-delivery.
  • Firms like HSBC and Nomura that are openly embracing public cloud technologies are highlighting the cost savings and agility while balancing security and regulatory risk
  • However, most financial services firms are lagging behind on adoption and utilisation of public cloud technologies. Understandably this is due to data security concerns and variability of regulation by jurisdiction. These concerns are further exacerbated by legacy thinking and cultural approaches to implementing technology solutions within financial services.
  • It is good to see new venues like LHoFT promoting innovation and benefiting from a close partnership with Luxembourg’s trade association ALFI and the Ministry of Finance. They could be uniquely placed to incubate innovation for the benefit the fund and investment industry.
  • The RegTech race has clearly heated up and whether in London or Luxembourg there is a feeling of oversupply of innovation. The dizzying array of technologies and solutions is both inspiring and yet it leads to a paradox of choice. This may be counterproductive at a time when financial services firms are trying to simplify their technology landscapes. This reminds me of the myth often shared in innovation circles of how when the space race was on, NASA spent a couple of million dollars developing a pen which would work in zero gravity – the Russians however, took a different approach – they used a pencil!
  • It has been said many times before and came up again over a chat with a management consultant on my flight back to London from Luxembourg, an innovation index may well be needed for financial services firms. The index score should not focus on who has an innovation hub (or not) but should link an increase in return on equity (RoE) to a reduction in operating cost due to innovation.

By Haider Mannan at Percentile