{"id":10594,"date":"2024-06-14T15:14:27","date_gmt":"2024-06-14T15:14:27","guid":{"rendered":"https:\/\/fintech.global\/regtech100\/?p=10594"},"modified":"2024-06-14T15:14:27","modified_gmt":"2024-06-14T15:14:27","slug":"finding-the-right-regtech-partner-for-you-part-2","status":"publish","type":"post","link":"https:\/\/fintech.global\/regtech100\/finding-the-right-regtech-partner-for-you-part-2\/","title":{"rendered":"Finding the right RegTech partner for you \u2013 Part 2"},"content":{"rendered":"<p><strong>The global RegTech sector is projected to reach a value of $66.9bn by 2032, growing at a 22.6% CAGR from 2023, according to a report from Allied Market Research. Given its size, it is evident that the market is full of various types of RegTech solutions all claiming to revolutionise the output of compliance teams.<\/strong><\/p>\n<p>However, with so much noise in the market, finding the right solution is like finding a needle in a haystack. FinTech Global spoke to several RegTech providers for an insight into what to look for.<\/p>\n<p>In this second part, hear the thoughts from industry experts at Arctic Intelligence, MAP FinTech, Napier AI, Qkvin, Regnology and Saifr.<\/p>\n<p>This is what each of them had to say:<\/p>\n<h2><strong>Arctic Intelligence<\/strong><\/h2>\n<p>Anthony Quinn, CEO and Founder of AML compliance and financial crime risk assessment provider\u00a0<a href=\"https:\/\/arctic-intelligence.com\/\">Arctic Intelligence<\/a>, is well versed in the onboarding experience. With Arctic Intelligence having been onboarded with hundreds of clients, the team has seen how big of a task picking the right partner can be. Firms rely on these third-party technology solutions to ensure they are compliant, so making a mistake can have huge consequences.<\/p>\n<p>One of the factors to look for when examining providers is the quality of the solutions on offer. Assess whether these tools are fit for purpose in the markets you operate in. Additionally, firms should assess the track record of providers. Specifically, in terms of delivering enhancements to content and product features in a timely manner. In the same vein, Quinn urged firms to look at the types of customers they have, how well they have been able to retain them and the quality of their team.<\/p>\n<p>Quinn added, \u201cOften regulated entities will be partnering with a RegTech for at least a few years and it is important to gain an understanding of each other\u2019s capabilities and have an honest conversation about the strengths and limitations, as well as the benefits both parties can realise when combining a large financial institution with a scale-up business and seek a common agreement of how you can support each other to ensure success and longevity in the relationship.\u201d<\/p>\n<h2><strong>MAP FinTech<\/strong><\/h2>\n<p>Christodoulos Mouskos, Head of Operations at regulatory reporting provider\u00a0<a href=\"https:\/\/mapfintech.com\/\">MAP FinTech<\/a>, offered five top tips for firms looking to find a new RegTech solution. The first of these tips was to pick an established vendor, which Mouskos described as \u201ccrucial.\u201d As part of this, firms should assess whether a RegTech provider has extensive experience in their field, a track record of continuous growth and financial stability to adapt to industry changes. Other tips for assessing their market presence include verifying they have a substantial and committed clientele, seeking references from peers, and examining industry awards obtained through voting. \u201cThese factors indicate the quality of the vendor\u2019s services,\u201d Mouskos said.<\/p>\n<p>The second tip Mouskos outlined was to pick a vendor with cost-efficient solutions, ideally, consolidated under a single platform to lower direct and indirect costs. Mouskos said, \u201cThis approach saves time and resources by eliminating the need for multiple integrations. Additionally, ensure the platform\u2019s adaptability to new regulations and ability to swiftly apply updates for regulatory compliance.\u201d<\/p>\n<p>Tip number three is to ensure the vendor has deep regulatory expertise. The regulatory landscape is constantly evolving, with many regions around the world having differing rules. As such, a firm can feel more comfortable with a vendor that has a proven compliance mindset and is proactive with updates on regulatory changes.<\/p>\n<p>In a similar vein, tip four focused on finding a vendor with a robust technology expertise. As part of this, firms should be looking for RegTech solutions that are leveraging the latest advancements in technology and have a proven track record. He added, \u201cEnsure flexibility in integration methods, scalable infrastructure to accommodate your business, sufficient validation checks to ensure your compliance, a user-friendly interface with the offering of capabilities for analytics and monitoring. Finally, look for a vendor who complies with GDPR and prioritises information security.\u201d<\/p>\n<p>The final tip Mouskos mentioned was to opt for a vendor with an exceptional level of support. A firm will need access to support when using the RegTech platform, whether it is for assistance or queries. Having a provider with good support processes can ensure the firm has limited friction when needing support. Things to look out for are personalized training, assistance in day-to-day tasks, and proactiveness, Mouskos said.<\/p>\n<p>In addition to the tips, Mouskos offered four red flags firms should also be on the lookout for. One of these is signs the vendor is inexperienced and has limited growth or industry recognition. Another warning sign is a service provider that offers solutions without covering all of your regulatory needs or without consolidating its solutions under one system.<\/p>\n<p>The remaining red flags Mouskos mentioned were service providers that come from pure technology backgrounds or pure compliance backgrounds, and a service provider that only has a basic level of support or shows a lack of responsiveness.<\/p>\n<p>Mouskos concluded, \u201cThe selection of a RegTech partner is business critical. It is worth deciding with the necessary care because, with the right solution, the entire business operation can become much more efficient, profitable, and sustainable.\u201d<\/p>\n<h2><strong>Napier AI<\/strong><\/h2>\n<p>For Greg Watson, CEO of end-to-end intelligent compliance platform\u00a0<a href=\"https:\/\/www.napier.ai\/\">Napier AI<\/a>, the first step firms should make when looking for a RegTech partner is to understand their own data systems, complexity, scale of compliance challenges, long-term technology strategy and risk appetites. Additionally, finding the perfect balance of build versus buy is key to ensure financial crime compliance software is optimal, compliant and scalable to current and future needs, he said.<\/p>\n<p>In terms of warning signs, Watson pointed to three key ones. This included a generation of too many false positives and false negatives that create long manual interventions and workarounds. Another red flag is a solution that is costly and has time-consuming maintenance and upgrades, leading to operational inefficiencies. Finally, firms should be cautious of firms with integration challenges when looking to implement new technologies or platforms, as these can bring additional costs or complexity.<\/p>\n<p>Once a firm has considered all these factors, they can start looking for what the best solution would be. This could be implementing an out-the-box hosted AML solution, or explainable AI models plugged in via an API to their existing systems. Watson added, \u201cBy adopting a modernised technology strategy with an agile solution partner, financial institutions will be actively safeguarding their reputations, gaining a competitive advantage, fostering innovation, and enhancing customer trust and satisfaction.\u201d<\/p>\n<p>Some of the final aspects that firms need to consider when searching for the perfect RegTech partner are compatibility and integration. Watson said, \u201cCloud based solutions with architectural approaches like containerisation ensure effortless integration via APIs, seamless upgrades and resource utilisation.\u201d<\/p>\n<p>Another factor to consider is the flexibility and diversification of the tool. Watson encouraged firms to seek best-of-breed point solutions that are easy to implement, integrate, upgrade and expand.<\/p>\n<p>Finally, Watson pointed to functionality and configurability as important features for a potential RegTech partner to possess. He urged firms to pick a RegTech partner that offers rich functionality, boasts an integrated sandbox, optimises workflows and provides usable audit trails. \u201cThis provides more control to your organisation, ensuring greater operational efficiency, as non-technical team members can create rules.\u201d<\/p>\n<h2><strong>Qkvin<\/strong><\/h2>\n<p>With so many RegTech solutions available in the market, it is easy to be overwhelmed. While they might each offer similar solutions, spending the time to look beyond the features can ensure a company can partner with the right solution.<\/p>\n<p>Laura Hadfield, anti-money laundering SME at the end-to-end Client Lifecycle Management solution\u00a0<a href=\"https:\/\/qkvin.com\/\">Qkvin<\/a>, outlined a three-factor framework that financial institutions should implement when in the process of selecting a RegTech solution to partner with.<\/p>\n<p>The first of these factors was regulatory evolution. She said, \u201cRegTechs that evolve with modifications in regulatory requirements, keep pace with the latest checks\/processes, and advise you of changes immediately are the ones that help you thrive.\u201d<\/p>\n<p>Factor two is personalisation. No two businesses are the same and so a one-size-fits-all approach is not the most effective route for a RegTech solution. Hadfield encouraged decisionmakers to look for a RegTech partner that takes a holistic view of your ecosystem into account before building a portal to eliminate bias and customise actions. The RegTech platform should allow for the tool to be personalised to meet the specific needs of the business. \u201cYour RegTech of choice should allow you to personalise the tool and work with you, to craft a solution that not only mitigates risks but also addresses the specific needs of your organisation,\u201d she added.<\/p>\n<p>Finally, firms should look for a RegTech platform that is leveraging modern technologies into their screening and ongoing monitoring solutions. The current geopolitical and AFC environments are constantly changing, and the RegTech platform needs to be able to keep up.<\/p>\n<h2><strong>Regnology<\/strong><\/h2>\n<p>Klaas Van Imschoot, Product Director at regulatory reporting provider\u00a0<a href=\"https:\/\/www.regnology.net\/en\/solutions\/regtech-overview\/regulatory-technology-regtech-for-banks\/?utm_campaign=20937147070&amp;utm_source=google&amp;utm_medium=cpc&amp;utm_content=693207335676&amp;utm_term=regnology&amp;adgroupid=159402754789&amp;utm_term=regnology&amp;utm_campaign=Brand+-+INT&amp;utm_source=adwords&amp;utm_medium=ppc&amp;hsa_acc=1232550009&amp;hsa_cam=20937147070&amp;hsa_grp=159402754789&amp;hsa_ad=693207335676&amp;hsa_src=g&amp;hsa_tgt=kwd-1191062141194&amp;hsa_kw=regnology&amp;hsa_mt=b&amp;hsa_net=adwords&amp;hsa_ver=3&amp;gad_source=1&amp;gclid=Cj0KCQjw6PGxBhCVARIsAIumnWaAkXtgNxwOOil10-kE8EWt0Q9EjjMJ7sPLxqsFvMA6Ns0p_dqerC4aArBPEALw_wcB\">Regnology<\/a>, offered seven key factors firms should be mindful of when they are looking for a new RegTech partner.<\/p>\n<p>One of the tips he offered is one that has been mentioned by many other industry experts, find a partner with provable expertise. Van Imschoot noted that an ideal RegTech partner will have a deep understanding of regulations and the regulatory value chain. This will ensure they can provide the firm with suitable guidance and support when attempting the navigate the ever-evolving regulatory ecosystem.<\/p>\n<p>The next tip offered by Van Imschoot stayed on the topic of regulation. He mentioned that firms should find a vendor that has comprehensive regulatory coverage that enables early anticipation and fast enhancements when regulatory change happens. On top of this, the provider should be able to rapidly expand into new jurisdictions.<\/p>\n<p>Tip three focused on the technology stack and ensuring the potential partner has robust and hyperscale technology that can support the shift from template-based delivery towards granular data delivery, he said. \u201cFinancial institutions should also assess if the solution is built on Cloud architecture for optimized performance and efficiency. Additionally, leveraging artificial intelligence and machine learning technologies can significantly enhance compliance processes and mitigate risks for organizations.\u201d Staying on the topic of technology, another one of Van Imschoot\u2019s tips was to pick a SaaS RegTech platform that allows the firm to focus on their core activities.<\/p>\n<p>Tip five was to ensure the platform is user-centric and has some level of configuration or customisation. As part of this, the platform should be intuitive, user-friendly and easy to adapt to the specific needs of the firm. On top of this, the platform should support collaboration between multiple stakeholders, such as regulatory reporting, risk and finance teams. Finally, a platform with a well-designed interface will also simplify data entry, validation and submission.<\/p>\n<p>His next tip was to examine the data management capabilities. He said, \u201cEnsuring high data quality is crucial for effective regulatory reporting. It\u2019s essential to verify if the vendor offers data integration, data monitoring, data quality and data governance tools as part of the platform.\u201d<\/p>\n<p>Finally, Van Imschoot\u2019s last tip was to assess the integration capabilities within the ecosystem. It is going to be more beneficial to have a RegTech solution that can easily work with existing systems, rather than needing time-consuming work to get it working. As such, the platform should be able to seamlessly integrate with the firm\u2019s infrastructure and enable data sharing and automation.<\/p>\n<p>In terms of warning signs, Van Imschoot noted a number of red flags firms should lookout for. These can be good indicators that a specific vendor might not be the best fit. For instance, if the cost of implementation outweighs the cost of the regulatory reporting platform, it might not be the right fit for purpose, he said.<\/p>\n<p>Another warning sign is a lack of innovation and platform updates. \u201cWithout ongoing investment in the underlying platform technologies, the platform may become outdated and unable to support future needs,\u201d he said.<\/p>\n<p>One final factor to watch out for is if the vendor is only focusing on the current needs of the firm. Business needs change, as do regulations, firms need a RegTech provider that is proactive and forward-looking. Coupled with regulatory and technology expertise, these firms will be better suited to growing alongside a firm, rather than becoming a legacy solution in a few years.<\/p>\n<h2><strong>Saifr<\/strong><\/h2>\n<p>Vall Herard, CEO of marketing compliance solution\u00a0<a href=\"https:\/\/saifr.ai\/\">Saifr<\/a>, explained that finding the right vendor boils down to asking the right set of questions.<\/p>\n<p>At the top of this list is an internal question. Herard encouraged firms to ask themselves if they understand the technology the vendor is using. For instance, if they are leveraging AI, what type of AI is it? They could be leveraging machine learning, deep learning, and\/or generative AI, or something completely different. Furthermore, what data did they use to build the models? Herard added, \u201cWere the models built to address your specific use case; in the example of RegTech, what rules are they designed for? How were humans included in the loop\u2014in the training, development, and testing? How do they safeguard against bias?\u00a0 And, how will your data be used and safeguarded?\u201d<\/p>\n<p>Staying on the topic of the models, Herard explained that firms will want to understand how the models are being measured, how often that occurs and how it might change over time. Additionally, firms should look to understand the accuracy, precision, recall, and F1 Score, among other measures. \u201cThese measures will help you to match the models to your needs.\u00a0 For example, if you can\u2019t tolerate a lot of false positives, you would want to understand the models\u2019 precision,\u201d he added.<\/p>\n<p>Herard continued by stating there could be a number of red flags firms should be looking for. This might be something simple like they\u2019re not able to answer some of the questions listed above. Or a red flag might be when a model works for a specific use case but gives the firm too many false positives to sift through or too many positives that aren\u2019t correctly identified.<\/p>\n<p>He said, \u201cEach case is unique, so it is important to take the time to ask the right questions and work through the answers.\u201d<\/p>\n<p>Saifr recently released a whitepaper on the topic of finding the right AI solution platform to partner with. Read the full whitepaper here:\u00a0<a href=\"https:\/\/insights.saifr.ai\/request-saifr-ai-questions-white-paper\">https:\/\/insights.saifr.ai\/request-saifr-ai-questions-white-paper<\/a>.<\/p>\n<p>The first part of this article can be\u00a0<a href=\"https:\/\/fintech.global\/2024\/05\/23\/finding-the-right-regtech-partner-for-you-part-1\/\">found here<\/a>.<\/p>\n<p>Keep up with all the latest FinTech news\u00a0<a href=\"https:\/\/fintech.global\/category\/fintech-news\/\" target=\"_new\" rel=\"noreferrer noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The global RegTech sector is projected to reach a value of $66.9bn by 2032, growing at a 22.6% CAGR from 2023, according to a report from Allied Market Research. Given its size, it is evident that the market is full of various types of RegTech solutions all claiming to revolutionise the output of compliance teams. [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":10595,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Finding the right RegTech partner for you \u2013 Part 2 - RegTech100<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fintech.global\/regtech100\/finding-the-right-regtech-partner-for-you-part-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Finding the right RegTech partner for you \u2013 Part 2 - RegTech100\" \/>\n<meta property=\"og:description\" content=\"The global RegTech sector is projected to reach a value of $66.9bn by 2032, growing at a 22.6% CAGR from 2023, according to a report from Allied Market Research. 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