An overwhelming majority (85%) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020 as the wave of new regulation a decade after the financial crisis shows no sign of abating.
Intertrust, a global leader in providing expert administrative services to clients operating and investing in the international business environment, surveyed over 500 executives covering the asset management, corporate, capital markets and private wealth sectors to identify the impact of RegTech on mounting regulatory and compliance obligations.
40% of respondents said their company struggled with a skill shortage in RegTech and compliance. Given the deficit in RegTech expertise and resource, most organisations are turning to external organisations for assistance.
According to the research, respondents believe the best source of support for RegTech solutions is traditional administration services providers combining regulatory experience with tech-based solutions (31%). This is ahead of FinTech disruptors (23%), law firms with strong regulatory experience (16%), audit firms (14%) and management consultancies (8%).
Stephanie Miller, chief executive officer at Intertrust said: “Following the recent onslaught of real game changing tax and regulatory regimes such as GDPR, MIFID II and DAC 6, firms have become increasingly reliant on RegTech solutions. RegTech has evolved from being considered a very niche concept reserved for those big enough to support the investment to becoming a mainstream solution for every financial institution no matter the size or budget. This development is mostly driven by the availability of third party providers providing cost effective expert solutions allowing access to the best RegTech without requiring the capital investment. In terms of industry evolution RegTech is still in its infancy but, as our research shows, we are beginning to see some trends in the emergence of certain preferred partners.
Although start-ups may have made the most progression in terms of the technical capabilities of the solutions, it is in fact the traditional administrative services firms who are coming out on top. By combining reliability, experience and expertise in regulation with market-leading technology they are fast emerging as the favoured RegTech partner for banks, asset managers and corporates.”