A super-important overview today. Data is just information is the standard line. Correct but not what matters in the real world. In the real world a regulatory announcement has consequences in organisations and requires actions – be it changing client agreements or operating procedures. What if we could use tech to go beyond the “regulation as pdf” to something far more third millennium? What if the new reg change was instead a domino which set in process a whole series of other dominoes falling inside regulated businesses?
Something radical is surely required given the absolute tsunami of regulation and the ludicrous black-hole like ability it is having in sucking increasing percentages of banks into being paper-pushers rather than wealth creators. At some point we will fall inside the event horizon and one person will be trying to make money in the bank and the rest pushing paper.
Clausematch and Evgeny came recommended to me long ago by Fintech übermensch Nigel Verdon. In this episode Evgeny leads us into the world of Regtech and gets beyond all the mad hype all too often associated with the sector. Whether we like it or not the world of Emperor Palpatine (“the bureaucrats have taken over”) is the world we live in whether #oldFS or #Fintech. Dealing with all the crap is a differentiator – indeed a sine qua non.
Topics discussed include:
- the notorious MIFID II at just under two million paragraphs long
- In 2016 alone there were >52,000 regulatory changes!!
- St Petersburg 🙂
- Clasuematch’s tech team in St Petersburg – the great availability of talent
- Clausematch’s expasnion in to the US and Singapore as well as London and StP
- Evgeny’s journey from moving to London in 2000 to forming Clausematch in 2012 – by far one of the earliest Regtechs
- Evgeny’s unique background in this context re understanding law, regulation and contracts and tech
- the problem regulated companies face
- a shoutout for the writing/research management tool Scrivener
- generational attitudes towards regulation – is it mad or is it an Act of God?
- Sir Paul Tucker on the LFP talking about regulation
- “Not a single Bank in the world is compliant with all the regulations.. they probably don’t even know 100% of the regulations that are applicable to them”
- “Regulation is not agile today. It is cumbersome and slow to implement and then cumbersome and slow to change as well.”
- “If a piece of regulation doesn’t work it takes several years to change it.”
- the problem here is the lack of tools for Regulators to do this better
- case study of regulation of minutiae as opposed to structural regulation – equity crowdfunding and Gladstone’s involvement in the 19thC creation of the “Company Law Company” (the version we have today – Companies House et al)
- volume problem of regulation but also the problem of discovery of regulation
- a top tier bank might be subject to 600 regulators worldwide!!!
- the subset of RegTech that is involved in this “discovery” issue
- form and format problem of regulation – every regulator uses different ones
- the information is not in a digital form
- the nature of structured form
- the importance of a “domino” model of regulation rather than a data/pdf model/mentality
- impact assessment angle on regulation
- pilot study with a bank re updating terms and conditions automatically
- the problem for banks today is that they are still solving all the above with manual labour
- digitisation of regulation – can code 10% of rules – eg trading reporting
- the production of regulation problem
- a pilot with an energy regulator
- the model of airline regulation
- “over the last two years pretty much every large bank in the world has got massive compliance projects in technology”
- the challenge of conduct-related fines
- the future of RegTech
- the regulators need to make all this workable otherwise “it” and “they” will be overthrown
- shoutouts for Clausematch – products and services
- Clausematch’s first client was Barclays 🙂
- policy management workshops
And much much more 🙂
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