RegTech Forum 2023 in London: Industry Leaders Discuss the Future of Regulatory Reporting
LONDON, September 19, 2023 – Suade, in partnership with the City of London Corporation, hosted the much-anticipated RegTech Forum at Guildhall in London. The event served as a platform to convene distinguished experts from the banking, technology, and regulatory sectors to discuss the dynamic landscape of finance and banking. The gathering took place in the wake of significant events earlier in the year, including the failures of Silicon Valley Bank and Credit Suisse.
These events sparked animated debates surrounding current regulatory trends and the critical importance of implementing common data standards, as discrepancies in interpretation and standards can have far-reaching implications for monitoring a bank's stability.
Diana Parades, CEO, and Co-founder of Suade, underscored the necessity of a collaborative approach within the community, stating: "It's essential that we all come together as a community. RegTech helps us navigate financial rules and ensure stability at an unstable time."
The event featured a keynote address by Alderman William Russell of the City of London Corporation, who emphasized the UK's dominant position in the fintech sector. He highlighted the UK's remarkable contribution of £6.6 billion to the economy and a staggering 217% investment surge in 2021.
Russell also underscored the evolution of RegTech from being perceived as a subset of fintech to its recognition as a vital, standalone sector. This sector now plays a pivotal role in offering solutions to regulatory challenges, ensuring that compliance is both efficient and cost-effective.
The forum's sessions delved deep into various pertinent topics. One session, titled "The Evolution of RegTech," explored the current trends in RegTech adoption, the challenges faced by regulators and financial institutions, and the potential of RegTech in reshaping compliance.
The consensus was that, given the increasing complexity of regulations and emerging requirements like ESG, technology has become indispensable in ensuring efficiency and adherence to both old and new challenges.
The implications of the Basel 3.1 regulations were also reviewed, focusing on their impact on internationally active banks. The revised global regulations have been described as transformative and will require many banks to adopt more rigorous risk management and risk reporting protocols.
In many cases, banks will be subject to increased minimum regulatory capital requirements. Panellists also discussed the impact and implications of Basel III’s "output floor”, which limits the regulatory capital benefit a bank derives from its use of models.
Bill Coen, former Secretary General of the Basel Committee, shared his insights gained from two decades of working for the BCBS. He traced his banking and regulatory career and the evolution of various regulatory frameworks and supervisory approaches. He emphasized the broader remit of the Basel Committee that includes effective banking supervision, the need for strong risk management and governance.
He noted the importance of regulatory sandboxes and careful engagement among the banking industry and regulators.
With the rollout of Basel III on the horizon, Bill Coen, the former Secretary General of the Basel Committee, delivered a rousing speech about the challenges and opportunities presented by the latest Basel III regulations. He emphasized the need to adapt to the changing financial landscape and utilize technology to navigate these changes seamlessly, stating: "With Basel III, we're adapting to the changing financial world. The key is to use tech to help us adapt smoothly."
Another significant discussion revolved around global data standardization. The financial sector's historical mishandling of data was brought to the fore, especially in the context of the 2008 crisis. The need for granular, standardized data was emphasized, with a call for proactive establishment of standards rather than reactive measures post-crisis. The interconnectedness of the financial system necessitates a global perspective on standardization, moving away from isolated national approaches.
Further discussions explored the challenges faced by smaller financial institutions, especially in the context of regulatory transformations. The complexities arising from a one-size-fits-all approach were highlighted, with a call for a more tailored regulatory framework that recognizes the unique challenges of smaller entities. Lastly, the potential of open-source data standards in financial regulation was discussed. The open-source approach was championed for its inclusivity, fostering collaboration, knowledge exchange, and continuous refinement.
The synergy between open-source tools and collaborative ecosystems was identified as a way to accelerate the evolution and acceptance of data standardization methodologies.
The event successfully brought the RegTech community together to facilitate a step change in regulatory reporting. We look forward to the 2024 RegTech Forum to continue our efforts in fostering in-person collaboration.
For more information about the annual event or Suade’s work in regulatory transformation, contact us here.