Suade

Suade enters FinTech 50

The much-anticipated 2016 FinTech50 list was announced to a global audience at the Money 20/20 conference on April 4th, 2016 with Suade being selected due to its leadership in the field of Regulatory Technology.


The list is “selected each year by an invited panel of experts of the 50 hottest European businesses who are transforming financial services.” Suade CEO, Diana Paredes, was featured on the cover, standing in front of Downing Street.

The electronic book can be found here: This year’s 50 hottest FinTechs in Europe, selected by the biggest names in FinTech


“City regulatory experts believe Suade’s regulatory platform could revolutionise the entire process chain regulation from publication to implementation …allowing banks to achieve continuous compliance.”

It is an honour to be selected amongst such a prestigious group of companies and also a testament to the hard work and dedication that the entire Suade team has to transforming the regulatory process for the financial industry.

Press clippings

The 50 financial technology (fintech) businesses most likely to revolutionise the world of money

The hottest 50 FinTech companies right now

UK firms dominate FinTech50 2016 list unveiled at Money20/20

RegTech is a thing

As a technology company focused on the financial industry, with a number of prominent banks as customers, we are often grouped with London’s wealth of great FinTech companies delivering financial services in new ways to consumers. While it is an honor to be grouped with such pioneering enterprises, what we do is in many ways fundamentally different. Our platform helps banks with their regulatory obligations instead of competing with them, but then ultimately it is still for the benefit of consumers (a more transparent, stable and efficent financial system).

While tackling regulatory issues from new perspectives last summer, we quickly realised that within the financial system, regulation itself is another, unique customer-type that needs to be serviced better. A couple weeks later, we were introduced in a meeting as a leading ‘RegTech’ company and it kind of stuck.

RegTech was highlighted as a separate sector in the Treasury’s 2015 Budget Report (Section 2.272/p.98) and in the UK Government Organisation for Science FinTech Futures Blackett Review. UK regulators took note and have responded in a commendably agile fashion. The Financial Conduct Authority, as part of their Innovation Hub and successful Project Innovate, highlighted RegTech as a key focus area and even took it a step further by launching a proposal for a regulatory sandbox and a call for input in November 2015.

The Institute of International Finance report on RegTech provides some anecdotal but quantitative analysis of the size of the problem that can cost a single financial institution over $1bn every year. Christophe Chazot, Head of Innovation at HSBC also highlights a unique aspect of RegTech where the sheer size and complexity of regulatory requirements allows for focused RegTech companies to collaborate to solve an end-to-end problem:

“A network of companies, focused on developing common technological solutions to regulatory processes (RegTech) promises to make the financial system both more accessible and more secure.” – Christophe Chazot, Group Head of Innovation, HSBC

While still in its infancy, it is safe to say that RegTech has emerged as its own sector in 2015 and looks to be a key focus area for the industry in 2016. So yeah, Regtech is a thing!

More RegTech news

eFinancialNews: RegTech - Meet the new faces compliance

The 21 Hottest RegTech Startups

Companies to watch

RegTech worthy of investment?

FinTech, RegTech and disruption of banking services

The Growth of RegTech

G7/G20: Lessons from the internet

Suade was asked to give its views: What can the financial services industry learn from the overwhelming success, adoption and innovation happening online?

"A unified and global regulatory framework, led by the G20, is now under way with Basel III, but there is still a need for greater collaboration and the adoption of fundamental standards."

G7/G20 Forum: Lessons from the internet

- Suade Labs (July 2015)

FT Camp Alphaville

Suade was invited to exhibit at the Financial Times annual Camp Alphaville event. Despite being the hottest July day in 160 years, the event attracted a wide range of speakers and professionals from the financial community such as Economists, Central Bankers, Transhumanist presidential candidates, the ex-CFO of Enron and Suade.

"Under the theme of the British seaside, the FT’s Alphaville blogging team hosted over 670 attendees at The Artillery Garden at the HAC on Wednesday 1 July, for its second festival of finance. Across five stages over 90 strategists, economists, corporate financiers, futurists and mystery guests debated the Greek debt crisis, China, the euro, the rise of artificial intelligence, currency wars, energy supply and much, much more."


Images, videos, the schedule and more information available here.

- Suade Labs (July 2015)

Suade goes to Korea

In May 2015, Suade was invited to join the Bank of England, the FCA Innovation Hub and UK Trade & Investment on a trade mission to Seoul, South Korea to share and discuss recent innovations around FinTech and RegTech.

Press Clippings

(translated from Korean) "UK’s delegation of fintech start-ups have visited Korea to seek opportunities to cooperate with Korea." Media News

(translated from Korean) "British Embassy in Seoul said it will host the ‘2nd Korea-UK Financial Forum’. Andrew Bailey vice chairman of Bank of England and Financial Service Commission Chairman Yim Jong-yong will participate the forum." Media Financial News

(translated from Korean) "The world leading Fintech industry investor, Level 39 estimates Korea is qualified to be a global learder as Korea’s expertise in finance and IT technology." Maeil Business News

(translated from Korean) "Britain’s fintech venture capital firm Level39 has signed a MOU with Korea’s fintech support centre at the demo-day on 27 May. Level39 CEO Eric Van der Kleij said that the UK’s fintech sector has developed tremendously thanks to government’s reform on regulations." Hankyoung News

(translated from Korean) "UKTI’s fintech expert Shaul David visited Korea to participate Korea-UK Finance Forum and said Korea has high potential for fintech sector to grow. He stressed that the FCA was in the heart of Britain’s fintech industry to grow." Bloter and Media

- Suade Labs (May 2015)

Simmons & Simmons forms exciting FinTech partnering deal with Suade

International law firm Simmons & Simmons has entered into a ground-breaking partnering arrangement with Suade Labs Limited, an innovative new Financial Technology firm based in London. Focusing on prudential regulation stemming from Basel III/CRD IV, Suade is building a platform for financial regulation that will increase transparency, reduce costs and allow firms to remain continuously compliant.

Given its longstanding core focus on the financial services and TMT sectors, Simmons & Simmons has identified FinTech as a natural key focus area for the future. The firm is committed to identifying and working closely with the exciting new breed of FinTech firms that are revolutionising the financial services industry. Simmons & Simmons sees enormous potential in Suade’s proposition and has, therefore, agreed to provide legal content and advice to Suade on a pro bono basis to assist it in creating a benchmark solution for the financial industry.

Commenting on the announcement, Pascal di Prima, the Simmons & Simmons partner who will be leading the team providing the core regulatory capital advice to Suade, said:

"We believe Suade’s platform could revolutionise the entire process chain of regulation from publication to implementation. As a firm, we have a long track record for innovation and delivering value to clients through new ways of working. This ground-breaking collaboration with Suade provides the perfect opportunity to extend that approach into the heart of the FinTech arena."

Simmons & Simmons’ managing partner, Jeremy Hoyland, commented:

"We see the FinTech sector as a key strategic area of growth for our business. We are, therefore, delighted to be able to provide our legal expertise in this innovative way to help one of the UK’s most exciting FinTech start-ups realise its ambitions."

Suade’s CEO and Co-founder, Diana Paredes, commented:

"When we looked at firms to partner with, Simmons & Simmons stood out due their extensive regulatory expertise as well as the quality of everyone we met there. They are a forward looking law firm that understands the FinTech scene and does not only want to be part of it, but also wants to help it achieve its full potential."

Click here for the full press release

- Suade Labs (May 2015)

Suade: IT Embraces Regulation

(as printed in the Financial Times, 20 Feb 2015, by Harriett Agnew)

Two former bankers have joined forces to launch a fintech start-up called Suade. It designs enterprise IT software for banks. The pitch? Banks face new regulations that are complex, costly and inflexible. But their legacy IT systems aren’t up to dealing with it. So they need software written with regulation in mind.

Diana Paredes (ex-Barclays), who set up Suade with Murat Abur (ex-Nomura), told City Insider:

“Our ethos is about embracing regulation. If you build IT software with regulation at the centre of your tool, you have something quite powerful.”

The pair both have parents who worked at the UN, and there’s a social purpose to Suade. Its software aims to make the regulatory process more efficient while helping smaller banks, which are disproportionately hit by regulatory costs. They argue that if smaller banks go out of business, it hurts the real economy. Suade is raising seed capital and next month joins the Microsoft Ventures Accelerator programme. A nice example of digital innovation easing the burden on banks.

- Suade Labs (February 2015)

The Cost of Regulation

People always expected large banks to complain when new regulations hit the wires because they had been at the center of the “too big to fail” debate and the primary target for the regulator. Surprisingly though, it is the small banks that are in the news now. The Wall Street Journal reported that these same small banks that did so well during the crisis are having serious profitability issues now, calling this effect “too small to succeed.”


Funnily enough, they pointed to the new regulations designed to make banks smaller. They said that the cost of regulatory compliance was way out of their budget. Some said well how much do small banks matter, who really needs them? Well it turns out there are over 5,400 “small” banks in the US with assets under $1bn. That’s 5 trillion dollars! So the Federal Reserve Bank of Minneapolis, one of the 12 branches of the US Central Bank, conducted a study in 2013 to delve into this issue and puts some numbers to all the talk. The conclusion is decisive: there is no cost-effective way for small banks to adopt new regulations. Whether hiring staff, re-focusing existing staff, external consultants, building or buying new IT systems for a “non-revenue” function weighs heavily on the profitability of banks at the smaller end of the spectrum (Assets<$50mn), with a single new hire decreasing the overall Return on Assets by up to 0.23%.


This may not sound like a lot, but 0.23% is HUGE, when you consider that the Fed Funds Rate is 0.09%. To make matters worse, the Fed supposed that firms at the larger end of the spectrum (Assets close to $1bn) will have higher costs and hire more staff resulting in even greater impact on profitability. Looking at the Minneapolis Fed’s findings below, we see that this puts 374 banks below the minimum profitability threshold of 0.4%!


This has astounding implications because it demonstrates that banks throughout the spectrum are feeling the pain of new regulations on their profitability. If we extrapolate the costs incurred to larger banks we seem some interesting results:


Large banks like JP Morgan ($2,500bn of Assets) will need hundreds of new employees (or IT expenses) to deal with new regulations. A recent Bloomberg article highlights Deutsche Bank’s EUR 1bn effort for regulatory concerns with over 1,300 dedicated staff. 1,300 employees that do nothing for the banks profitability! In the Fed’s study, a new regulatory expert would command a salary of $70k in rural areas and $90k in urban. At a large, systemically important bank, a regulatory expert might make $100-250k depending on bank size. This means a bank with $500bn in assets (ex. Danske Bank/Bank of Nova Scotia) will be spending a minimum of $50mn to implement new regulations. Sure, it is only 0.01% of total assets. But if we consider the $223tr of worldwide assets, then that is a minimum of $22.3bn in additional annual operational costs globally that should be avoidable. We are looking forward to this challenge.

- Suade Labs (September 2014)

Update! A friend showed me this OECD Working Paper that put the total cost at 5-15bps (which is roughly $100bn globally). So basically, it’s kind of a big deal.

Regulation in the News

The Register: Software bug costs Citigroup $7m after legit transactions mistaken for test data for 15 years

If you want to see a grown banker cry, the phrase “Basel IV” should do it. [FT: Basel IV spectre looms][http://www.ft.com/cms/s/0/a9d6eb94-ce5d-11e5-831d-09f7778e7377.html#axzz48Fs6t2As]

Basel IV is coming and it is going to cost a-lot. Banks are struggling to cope with increasing costs, uncertainty and lack of solutions for regualtory objectives. Bloomberg: Europe’s Banks Brace for Costs


The funding that financial institutions in the UK now have to give to fund the Prudential Regulation Authority increases by 35%.
FT: Cost of UK regulation rises for banks and insurers


Deutsche Bank fined $7.8mn for a coding error causing millions of trades to be misreported. DB is spending over $1.3bn to get on board with new regulations and has 1,300 staff dedicated to the effort.
Bloomberg: Deutsche Bank fined


List of failed US banks since 2008 breaches 500!
Federal Deposit & Insurance Corporation (FDIC): Failed Banks List


Deutsche Bank CFO, Stefan Krause tells German papers bluntly that regulatory compliance must be prioritized over dividends. Respect to Mr. Krause and his honesty to tell it like it is.
Reuters: Regulation has priority over dividend


JPMorgan pays over $20bn in regulatory penalties in 2013 without even breaking a sweat.
FT: The Regulatory Cost of being JPMorgan


Medium-sized banks like banks like NYC Bancorp are desperately shedding assets to avoid approaching the $50bn asset barrier. Crossing the threshold would make them “systemically important” and hence subject to a wide barrage of stress-tests and regulatory requirements. If only there was a quick and cost-effective solution …
The Economist: Too small to torture


One of the unintended consequences of increased regulation is the decrease in competition and choice due to the lack of cost-effective and flexible regulatory technology for smaller firms.

“The cost per revenue dollar, for the personnel and technology to remain regulatory compliant, has grown disproportionately higher for smaller regional firms thus driving many into the arms of larger competitors.”

Forbes: Too small to succeed


Great IMF Working Paper on RWA differences across borders and potential ways to address these issues.
IMF: Why do RWAs differ across countries?


Job market is hot for risk and compliance staff that are knowledgeable and can help banks comply with the constant deluge of regulations.
WSJ: Lenders Bolster Risk and Compliance staff

Press clippings

SEI forms relationship with RegTech startup Saude

An encounter between regulators, banks and tech

BBVA Regtech: how technology also helps comply with regulation

Where does Brexit leave UK FinTech?

The Top 5 Legal and Regulatory RegTechs

International RegTech Companies Defining the $100-Billion-Dollar Industry

UK firms dominate FinTech50 2016 list unveiled at Money20/20

eFinancialNews: RegTech - Meet the new faces compliance

The 21 Hottest RegTech Startups

Companies to watch

RegTech worthy of investment?

FinTech, RegTech and disruption of banking services

The Growth of RegTech

The 50 financial technology (fintech) businesses most likely to revolutionise the world of money

The Guardian: Winners of third ODINE call announced

Let’s Talk Payments: 21 hottest RegTech startups defining the industry

Dell Entrepreneur Spotlight Series: Suade

eFinancialNews: RegTech - Meet the new faces compliance

FT Alphaville 2015: Where’s my hoverboard?

EntrepreneurCountry: An interview with Suade CEO, Diana Paredes

V3: Microsoft Ventures showcases latest tech startups

(translated from Korean) "UK’s delegation of fintech start-ups have visited Korea to seek opportunities to cooperate with Korea." Media News

(translated from Korean) "British Embassy in Seoul said it will host the ‘2nd Korea-UK Financial Forum’. Andrew Bailey vice chairman of Bank of England and Financial Service Commission Chairman Yim Jong-yong will participate the forum." Media Financial News

(translated from Korean) "The world leading Fintech industry investor, Level 39 estimates Korea is qualified to be a global learder as Korea’s expertise in finance and IT technology." Maeil Business News

(translated from Korean) "Britain’s fintech venture capital firm Level39 has signed a MOU with Korea’s fintech support centre at the demo-day on 27 May. Level39 CEO Eric Van der Kleij said that the UK’s fintech sector has developed tremendously thanks to government’s reform on regulations." Hankyoung News

(translated from Korean) "UKTI’s fintech expert Shaul David visited Korea to participate Korea-UK Finance Forum and said Korea has high potential for fintech sector to grow. He stressed that the FCA was in the heart of Britain’s fintech industry to grow." Bloter and Media

Simmons & Simmons: Firm forms exciting FinTech partnership

FinancialTimes: Suade - IT embraces regulation