While some Financial Services regulations have been accepted as needed (e.g. KYC), others can get repealed if the new administration has a different take on Financial Services regulation. Since most RegTech companies or RegTech products are born to make it easier/ more efficient to comply with prevailing regulations, what happens when regulations are repealed and your RegTech startup in working on/ has a solution in the market for its compliance? How are RegTech companies adapting their strategy in such scenarios? Just curious.
All RegTech startups I know - including Lifescale Limited - are focused on the future of regulation, rather than the past or present. We learn how to present a solution for the present yet one that is (to the extent possible) future-proof. The inherent speed and agility of a startup is its best defense against what you describe. Theoretically, we should be able to see things before others do, and react to them before others can. Theoretically.
Appreciate the response @vinay.jayaram. I think I understand what you mean by focusing on the future and being able to see before other do ( foreseeing the general direction). Interestingly, some of the regulations could be short-lived especially if it takes 2 years to debate a regulation + 1 year grace time to comply with it when governments can change in 4 years. So, the same agile advantage could work against the startup (esp if they have been first to market)… so was curious.
You are certainly right to ask the question. There is of course a wider issue concerning regulation per se and that surrounds the self perpetuating nature of non profit bureaucracies. I am a cynic as far as this subject is concerned. Of course some regulation is necessary but the fact that RegTech companies even exist is testament to the intrusive an bureaucratic nature of regulation. But the point you make about new administrations is a valid one. The nature of the beast is usually destructive or opportunistic depending on which side of the political spectrum one sits. Sadly most of the big decisions on regulation relate to unexpected occurrences. I’m afraid, ,however this is something which all companies in this sector just have to deal with.
This is a great question. in Canada regulators have gone backwards on RegTech. Not allowing any of the current RegTech offerings to satisfy KYC.
But the bigger problem I see here is RegTech disruptors need to be in discussions with Banks, Insurance, Legal as they are the very reason we have these antiquated processes that make it difficult to evolve.
Here is a RegTech event happening on 11 January 2017
RegTech 101: Implementing a RegTech Solution in your Organization