Accelerating RegTech Adoption: Regulatory & Industry Collaboration at The London RegTech Forum

The panel on "Accelerating RegTech Adoption: Regulatory & Industry Collaboration" highlighted key barriers and enablers to the widespread adoption of regulatory technology.

Barriers to Adoption:

• Procurement Challenges: Long procurement cycles and the growing power of procurement departments post-COVID, especially due to cost-cutting measures, make it difficult for RegTech solutions to be adopted swiftly.
• Cost: Many organisations view regulation as a mere compliance exercise, failing to see its transformative potential. High costs remain a major deterrent.
• Perception of Risk: RegTech is often viewed as risky, and there’s a need to shift this perception within the industry.

Enablers of Adoption:

• Regulatory Push: Strong regulatory stances and fines, particularly from the US, have spurred adoption, especially in areas like financial crime.
• Collaboration: Governments and regulators are beginning to embrace RegTech. For example, the UK Treasury's consultation on crypto regulation, where RegTech was called out as a partner in tracking market abuse, illustrates the growing recognition of its role.
• Automation and Data-Driven Approaches: Automation allows employees to focus on more critical tasks, while data-driven methods, such as machine-readable rulebooks and real-time compliance, offer long-term potential for efficiency and innovation.

Future of RegTech:

• Over the next 5-10 years, RegTech is expected to evolve with technologies like generative AI and blockchain, supporting outcome-based regulation. The UK must develop solutions for digital identity and verification, as well as harmonize efforts in AI and blockchain to remain a leading RegTech hub globally.

The panel emphasised the importance of upskilling supervisory bodies, collaboration between regulators and industry, and embracing a future where technology is fully integrated into regulatory frameworks.