London, December 5th 2018

On Monday, December 3rd 2018, we had the opportunity to participate in this year’s RegTech Rising, with our CEO, Tom Spouse, as a panelist on Summit Day.

RegTech Rising’s Summit Day is a closed-door event that brings together today’s most influential regulators, industry practitioners, lawyers, and technology experts in intensive back-to-back sessions around how transformative technologies, namely, Distributed Ledger Technologies (DLTs) and Artificial Intelligence (AI), could help solve Regulatory problems.

The morning kicked off with opening remarks from Richard Maton, Executive Board Member of the International RegTech Association. This was followed by Professor Peter Treleaven's keynote address on “Which New Technologies Are Game Changers For RegTech? How Will DLT; AI; Cloud; Quantum Computing; Data Analytics; Biometrics; & Cryptography Transform Compliance?” opening the door for deep dives into the two technologies that are on everyone’s mind in the FinTech & Regulatory space today: DLTs (including but not limited to Blockchain) & AI.

Expert Insight On Applications Of Distributed Ledger Technology To RegTech
John Tierney, Senior Account Manager with Coinfirm, who has a long history in the Capital Markets Space, gave an excellent introductory speech explaining how blockchain can be practical solutions for Regulatory issues. With Asset Transfer Management being one of the many problematic areas in the Financial Services space, Coinfirm’s technology is a simple and yet groundbreaking solution that will alleviate inefficiencies in the market.

How Distributed Ledger Technologies Could Solve Regulatory Issues
Following this, a panel facilitated by Peter Stephens, CIO of DrumG Technologies and former Head of Blockchain at UBS was assembled. Prospect 33’s CEO, Tom Spouse, provided insight into the adoption (or lack thereof) of blockchain/DLT applications by his Tier 1 clients. He was joined at the table by Demetrio Megliorati who heads the acclaimed Blockchain Program at Banca Mediolanum that has successfully brought together a network of Italian banks using DLT. Offering her expertise on Data & Regulation was Sonal Rattan, CTO of Exate Technology, as well as Jean-Louis Schiltz of Schiltz & Schiltz, who is today one of the foremost legal authorities on Blockchain Regulation, and John Tierney from Coinfirm.

Harnessing Distributed Ledger Technologies for RegTech
After the main discussion, the panelists then led round-table discussions with the room on the same subject. In a room full of regulators, technologists, and industry leaders, insights were shared on why, despite its potential to revolutionise and future-proof not just compliance within the Financial Services industry, but across all industries, DLTs have a slow market adoption.

The conclusion: because of its nascent state, Regulators themselves need to facilitate the requirement for DLT adoption, and that this change will happen within the next 5-10 years. Our key takeaway: firms who are willing to take the risk to stay ahead of the curve will surely be rewarded in the long-term when transition and regulated implementation finally takes effect.

Lunch was a much deserved break following the morning’s exhaustive, and yet delightfully thought-provoking sessions.

Expert Insight On Applications Of Artificial Intelligence & Machine Learning To RegTech
The afternoon session opened with Professor Tom Butler from the University of Cork. Providing his expert insight on the technology behind Artificial Intelligence (heads up: there is no such thing as “Artificial Intelligence” – yet!) and the benefits of its applications within the Financial Services industry.

How Artificial Intelligence & Machine Learning Could Solve Regulatory Problems
The panel was led by Conan French, who is the Senior Advisor for Innovation and FinTech with the International Institute of Finance (IIF). Alongside Professor Tom Butler on the table were a mix of vendors, regulators, and industry leaders. From the vendor side were Diana Paredes, CEO & Co-Founder of Suade and Charles Delingpole, CEO & Founder of ComplyAdvantage. Regulator Peter Thomas, Senior Manager, Prudential Regulation Authority (PRA) Data at the Bank of England, made a point that a majority of those in the industry forget: that regulators are as burdened as the institutions. And representing the industry, Ian Bamber, Senior Delivery Manager of Trade Data Quality & Trade Transaction Reporting from HSBC very expertly reminded the room that while there were indeed technologies out there that could greatly maximise the efficiency of compliance and reporting, the very nature and culture within the Financial Institutions made it difficult to adopt these technologies, and that any successful project implemented required future-thinking sponsors (aka unicorns).

Harnessing Artificial Intelligence & Machine Learning For RegTech
At the roundtable discussions, the sentiment around the room was unanimous: before any Machine Learning or Artificial Intelligence applications could be successfully implemented, the first thing on everyone’s agenda was to clean up the Data.

Data drove the rest of the afternoon’s agenda.

Expert Insight: Scaling For RegTech Begins With The Basics
From the Bank of England, Beju Shah, Senior Expert in the Technology Division, gave a compelling speech on Data, and how urgent it is for the industry to start doing Data right. In this, he demonstrated how although the processes of compliance today were necessary, the delivery method is extremely flawed.

When there are thousands of spreadsheets that need to be manually reconciled (not to mention PDFs embedded into them), what it has created is a delivery method that is not only extremely inefficient for regulators and institutions alike, but more importantly, wholly unsustainable at scale. Point being, if the industry went back to the basics of structuring data assets correctly (no matter the requirements or regulation standard, no matter the scale, now or in the future) all parties will be well prepared for a successful, efficient, and cost-effective solution.

Industry Collaboration To Develop Common Standards For RegTech
Richard Maton led the last panel discussion of the day. At his table were Dr. Daniel Gozman, Senior Lecturer at the University of Sydney Business School; Michal Piechocki, Chairman & CEO of the Business Reporting - Advisory Group; Leo Labeis, CEO of REGnosys; and Steven Burman, Managing Director at Barclays. They each shared insight on the issues surrounding the differences and reconciliation of regulatory standards across the globe and the internal difficulties and successes of implementing projects within the structure of the industry as it now stands.

The day ended with a question for all the participants that were in the room, and one that we would like to throw at you as well: what issues do you believe need to be urgently addressed in order for RegTech to facilitate real and transformative change?


About Prospect 33: Since 2005, Prospect 33 has supported Financial Services institutions by navigating them through the continuous changes in the landscape of the industry. The company has since grown to include legal entities in Hong Kong, Singapore, Canada, Poland, the United Kingdom. Since 2005, Prospect 33 established a significant foothold in the financial services sector and has trading terms in place with numerous global financial services institutions. In New York & London, Prospect 33 has the reputation as the leading tier-2 Change Management consulting firm in the Risk & Regulatory space. In early 2018, Prospect 33 began the refocus of its core business into FinTech and transformative technologies while maintaining the emphasis on having a highly diverse workforce and developing the next generation of Prospect 33 Future Leaders™.


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