The FinTech50 2020 Digital Yearbook

RegTech - Past, Present, Future

Mukund Umalkar, Head of RegTech Partnerships, and Ian Hollowbread, Head of RegTech, at ING on RegTech as a driver for change.

Regulation matters. It affects every one of our employees, our customers and our shareholders. We believe that ‘RegTech’ – Regulatory Technology - can be a fundamental driver for change and a source of value creation. The potential impact RegTech can have is further amplified in a post-pandemic world which has prompted a seismic shift towards technology and digital solutions.

At ING RegTech Labs London we have been on a journey of our own, with focused efforts on RegTech exploration and adoption. Regulators do not set regulations with single institutions in mind, they set them for the industry – our approach to RegTech is therefore industry led. Where possible, we aim to bring together multiple industry participants - including Regulators, Financial Institutions, Venture Capitalists, Technology Vendors, and Advisory and Advocacy firms. Since 2017, we have run multiple initiatives, across various sub-segments within the regulatory chain – including within Horizon scanning, Obligations Management, Regulatory Reporting, KYC/AML, Data Privacy to name a few – some very successful, others less so! Over time, with experience and through proactive engagement with the ecosystem across the globe, we have built a unique perspective on core challenges in RegTech adoption, what the futureof RegTech should look like, and how to go about building it.

We see a huge potential in RegTech solutions. However, there are some structural impediments that need to be addressed, again, with an industry-wide-lens. From the perspective of a financial institution (demand side), the RegTech ecosystem is still very fragmented with several, rapidly evolving, somewhat overlapping, point solutions. This makes it very difficult to choose one vendor over the other, especially in large complex global institutions, that typically carry the technology debt from legacy solutions and come from a culture of building solutions internally. From a RegTech vendor perspective (supply side), the long sales-cycles make things challenging, especially given the lack of an industry-wide approach for evaluation, distribution and adoption of market solutions. Unfortunately, and too often, this results in a lack of adoption of innovative RegTech solutions, and continued reliance on manual or semi-manual processes, across the industry.

Imagine a solution that (i) curates industry leading solutions in one place (ii) standardises how modern and legacy solutions interoperate, without the need to agree bilateral or bespoke integrations, and (iii) provides an orchestration layer that manages application distribution, security and interoperability for the desktop environment, in a way that is very similar to what iOS or Android mobile operating systems do for the mobile phone. What we need is an industry platform that operates like the “Appstore” concept enabling discovery and deployment of RegTech solutions and which can also adhere to stringent risk and security requirements at a financial institution.

We have teamed-up with a strategic partner on an ambitious initiative, called Project Orchestrate, that aims to build the next generation platform for risk andcompliance solutions. The objective is to bring together the market leading solutions, and legacy tooling, under a single platform, on the desktop environment. This platform will enable orchestration of multiple solutions into streamlined workflows creating meaningful, contextual and end to end userexperiences.

We are currently in the process of on-boarding select vendors / partners on the platform, and very grateful for the support, and positive feedback we have had from global financial institutions and regulators from around the world. Our objective is to keep this platform an “Open” ecosystem and enable deployment of solutions at scale in a way is commercially viable suppliers and consumers alike. We believe that Project Orchestrate is necessary to bring the supply and demand side together, and to standardise how our industry leverages innovative risk and compliance solutions, further accelerating our respective digital transformation journeys and ultimately improving customer outcomes.

The good news is that these challenges are not unique and there is a proven path forward.

Contact Mukund and Ian at regtech@ing.com