Why RegTech is the industry to watch in 2024

Paul Roche our consultant managing the role
Author: Paul Roche

The year 2024 emphasises the crucial role of RegTech — a beacon guiding firms through the evolving global regulatory landscape, enabling them to connect the dots between short-term challenges and long-term objectives, and strategically positioning themselves amidst dynamic shifts. 

The Global RegTech Market size is expected to reach $60.7 billion by 2030 and whilst RegTech, or Regulatory Technology, is not a new concept, it is changing the game and will disrupt the regulatory landscape by providing technologically advanced solutions to the ever-increasing demands of compliance within the financial industry. 

Join us as we explore why RegTech emerges as the industry to watch, providing a compass for success amid regulatory complexities and evolving market dynamics. 

What is RegTech?

Ultimately, the objective of Regulatory Technology is to help businesses adhere to rules more efficiently and cost-effectively. 

This is enabled through advanced technology, including through the use of innovations such as machine learning, biometrics, and blockchain. 

How does RegTech work? 

RegTech facilitates compliance through workflow automation, generating accurate and timely reports, and managing regulatory documentation efficiently. It also addresses risk management by assessing and mitigating compliance risks. 

Key functionalities include automated data collection and standardization, real-time monitoring of regulatory changes, and the use of rule engines for interpreting and applying complex regulatory requirements.

Just like in all sectors, financial services companies are increasingly demanding the streamlining of regulatory processes and technology is providing an efficient pathway to do so. 

In the UK, there has been generous investment into RegTech from the government to help financial services companies remain low-risk and compliant. It’s a rapidly growing and agile sector, but is it all plain sailing? 

What challenges are regulatory professionals facing?

We are noticing a few challenges that regulatory professionals, particularly in Financial Services are facing. Insufficient governance, for example, is proving to be difficult to overcome, along with poor integration into technology ecosystems. 

These challenges can cause delays which can subsequently be costly, both of which RegTech in essence seeks to avoid. 

There have also been challenges with the loss of data integrity. This relates to data corruption, whereby unwanted or unexpected changes to data take place during storage, access or processing. 

Additionally, there have been challenges with limited control of master data between functions. Master data represents all the data critical to the operation of a business, for example, customer information, which could result in losses to the business if missing or mismanaged. 

What reporting regulations are changing in the banking and investment space?

In the PRA’s Future Approach to Policy (DP4/22), the PRA announced it was launching a Banking Data Review (BDR). The review will look at what data it collects currently and what data the PRA needs now and in future. Regulators are now looking to technology to revolutionise their approaches in banking and investment. 

In the UK, for example, the Financial Conduct Authority (FCA) is partnering with numerous financial services organisations in Phase 2 of its digital regulatory reporting pilot and looking at how to convert regulation into code. 

This can then be executed across standardised bank data. In Austria, however, the regulator requires each bank to prepare data in a standard format in a series of ‘data cubes’, allowing cost-sharing of compliance as well as standardisation of data collection, whilst enabling them to retain control over commercially sensitive data. 

Increased regulation will naturally slow down systems and processes in the short term, particularly as RegTech professionals adapt to the changes, but long term we are likely to see more efficiencies and cost savings. 

What candidate profiles are RegTech companies seeking?

Naturally, as the RegTech market evolves, so too does the candidate profile that businesses seek. 

Financial services professionals looking to work in RegTech must be educated and prepare for the next wave of change to ensure they react effectively and efficiently. 

There has been an influx in regulatory recruiting roles within financial services, especially in highly regulated areas like brokerage and investment management. 

We have seen increased demand for Qualified Accountants with International Financial Reporting Standards (IFRS) experience with specific rules and regulations, but fairly fluid between types of financial services organisations. 

There is also a need for candidates who are qualified and have done a rotation in a regulatory environment, with 2-3 years of experience. 

How can we solve this talent shortage in RegTech jobs?

Addressing the talent shortage in RegTech jobs requires strategic solutions. As regulations evolve, the demand for skilled professionals in this field is on the rise. 

Roles such as Heads of Regulation or Regulatory Analysts are becoming increasingly crucial, leading to a surge in hiring. 

Due to the dynamic regulatory landscape, individuals with the right expertise can negotiate higher salaries and more attractive packages within the financial services sector. 

At Marks Sattin, we specialize in connecting top-tier candidates with the most fitting roles. With a 30-year track record in contract, interim, and permanent placements, our tailored services cater perfectly to individual needs. 

If you’re looking for your next job in RegTech, find out more about compliance jobs or browse our technology jobs today.

27/02/24
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