December 8, 2020
Thomson Reuters’ 2021 report on “Fintech, regtech and the role of compliance” shows huge leap in the adoption and implementation of technology despite budget constraints
In pursuit of sector growth, financial services firms and their customers are realizing value from fintech and regtech solutions
DALLAS, December 8, 2020 – As the financial services sector navigates unprecedented challenges stemming from the COVID-19 pandemic, research conducted by Thomson Reuters Regulatory Intelligence (TRRI) indicates that firms have found it necessary to roll out new technologies, often at speed, to enable business activities to continue as countries went into lockdown.
The fifth annual report on Fintech, regtech and role of compliance in 2021 sheds light on the question of whether corporate governance and the culture of financial services firms have kept up to pace with new technologies. The findings show that even through cost concerns, firms have adopted and implemented more technology during the pandemic in order to keep up with sector growth—70% of firms reported that the pandemic had increased their reliance on technological solutions.
“Although financial innovation and technological solutions have become increasingly popular over recent years, the pandemic has led to heightened challenges, and the need for increasing efficiency continues to grow,” said Susannah Hammond, Senior Regulatory Intelligence Expert at Thomson Reuters. “The pace of development is expected to increase as more of the issues exposed by the pandemic seek technological solutions—this is equally true of elsewhere with all areas of technology penetration or adoption booming as a result of the pandemic.”
When asked what one thing firms would like to see delivered in the future, the top areas identified were: improved efficiency and speed of processing, delivery of cost savings and the provision of accurate data analysis to inform decision making. Other themes included consistency in technological approach, particularly for digital identification, due diligence and “know your client” solutions.
The report found that such a wish list could only be delivered alongside a greater focus on corporate governance. While the development of fintech and regtech applications is making considerable progress, the industry needs to mature at the same pace.
Concern about budgetary limitations and pressures are a natural consequence of business and economic disruption but the report highlights that firms need to carefully consider any cuts which might affect risk and compliance functionality. Although boards and risk and compliance functions are becoming more involved with technological solutions, and firms have begun to invest in specialist skill sets, further investment may still be necessary. However, it is surprising to note that 9% of respondents reported not investing in technological solutions as part of an overall strategic decision, rather than a lack of resources, skills, or infrastructure.
This year’s survey results represent the views and experiences of more than 400 compliance and risk practitioners. The respondents include those from all sectors of financial services, global systemically important financial institutions (G-SIFIs), and technology start-ups.
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