Diana, our CEO, spoke at the RegTech Summit, hosted by the Luxembourg House of Financial Technology (LHoFT) on the state of the RegTech market: an outlook for compliance and regulations.
Regtech is the new concept that is revolutionizing financial technology. It represents a great opportunity for companies to meet regulations and reporting obligations through technology. Companies become data-driven and thus have to rely on cloud computing and big data for the sharing of information. This gathering will present the concept of RegTech and discuss the benefits of adopting these type of solutions, give more details to companies regarding the need of managing cloud computing and data as well as the best fields of application to use this technology.
The first round table of the day, focusing on the state of the RegTech market, brought together Diana Paredes (CEO and Co-Founder, Suade), Henri Wagner (Partner, Allen & Overy), Christophe Buschmann (Data Protection Commissioner, CNPD) and Jacques Pütz (CEO, LUXHUB). It was moderated by Stéphanie Noël. According to Henri Wagner, "RegTech is the next big thing, and it will be as promising as we think". He then explained that we are currently witnessing a regulation avalanche, which started after the financial crisis. "In such a context, risk must be managed in a new way. The marriage between regulation and technology, in 2017, made it possible". This is why, according to him, RegTech has a bright future. Yet, he pointed a couple of challenges that need to be addressed in the near future: the potential regulation of RegTechs and the issue of data protection. Christophe Buschmann then shared his views on the current state of the market: "Sure, regulation brings additional constraints, but it is more of a question of how you look at it, because it brings many opportunities. In the current context, trust is key, and regulation can be a very helpful tool". He then explained that the regulator's role is to leave sufficient room to RegTechs so that they can explore these opportunities. The CNPD expert also added that Luxembourg has a culture of sharing, making it quite unique and open to innovation. He concluded: "We face risk all the time. Let's build something sustainable for the future". According to Diana Paredes, success comes from the fact that we considered data as the new oil: "We use the regulation to better use the data. It allows us to do analytics, AI, etc. Yet, it can only be done if the data is clean and normalised". She also insisted on the fact that regulators need to think about the new regulations they put them out there. She then shared the example of the GDPR, which has made it difficult for small companies to sell their services. "Also, lately, we have seen many incumbents call themselves RegTechs, but actual RegTechs bring real innovation, as it's all about interoperability. There are so many technologies out here: sky's the limit. The problem is more about the legacy mentality, a change in mindset is needed. It actually has nothing to do with technology, but with the way we adopt it," she added. Then, Jacques Pütz, took the example of LUXHUB, founded by 4 Luxemburgish banks in order to mutualize the costs with the implementation of PSD2. "All banks are currently facing the same challenges and time is ticking for them. Some banks are even afraid, but they have no other choice, they have to open up. It means a change of culture," he added.