Regtech companies have gained a lot of attention lately as demand for tier services keeps rising. The success of these regtechs has become inevitable with the changing and increasing regulatory requirements and the globalization of financial services companies.

Finance Magnates recently had the opportunity to sit down with the MAP Fintech CEO, Panayiotis Omirou, and discuss the overall industry trends, regulations and much more.

1. What exactly is regtech, and what does it entail?

Simply put, regulatory technology or RegTech refers to any technology that helps companies comply with their regulatory requirements. Cutting-edge technologies such as artificial intelligence, big data, machine learning, etc., are used to ensure that companies are more effective in reaching regulatory compliance. RegTech solutions can provide great value to businesses in the financial industry looking for assistance with regulatory reporting, risk management, identity management,    compliance  and transaction monitoring. By embracing RegTech, companies can quickly fulfil their various regulatory obligations and focus more resources on the revenue-generating processes of their business.

2. Why did the demand for regtech firms explode suddenly?

The increasingly complex regulatory environment, along with the heavy penalties issued by regulators in the last couple of years, explains why there has been a marked increase in demand for regulatory technology solutions. However, it is fair to say that the demand for RegTech solutions is not new. In terms of trade level reporting, this market is rather mature with regards to MiFIR and EMIR. Nevertheless, the emergence of firms using technology for trade surveillance and monitoring functions has grown. For instance, as a result of Brexit and the COVID pandemic, organizations are looking to automate solutions and ease staffing costs. Brexit has also drawn attention to firms now operating under a different set of regulations. Reporting requirements for firms that want to operate in both the EU and the UK have become more stringent as the FCA and ESMA have naturally diverged. Besides this, the individual position of each regulatory body in continental Europe has had a dramatic effect on their ability to attract companies into their areas of control. Hence, regulatory arbitrage has become a legitimate concern.

3. How do you think the regulatory space has changed for financial services firms over recent years?

RegTech has shifted from being a best effort to adhere to the spirit of the rules under the circumstances to a more comprehensive effort to be as accurate as possible. It is a fact that Brexit has polarised both European and UK regulators into a position of 'Coopetition', whilst attempting to make their specific markets more attractive to outside investment. Jurisdictions across the region must endeavour to show probity with regards to their own regulatory rulings, whilst at the same time not making these same rules a barrier to trade or entry. As such, one can see that there is a balance to be struck. For instance, the suggestions around the usefulness of RTS27/28 is just one example of this conundrum.

4. As you are working very closely with financial services companies, how do you think they are handling the changing regulatory positions?

As alluded to previously, they are taking it seriously in light of the recent geo-political movements in Europe. Currently, there are both more things to be aware of, as well as decisions to be made regarding participation within those very markets. Implementing solutions that are transparent are paramount. Albeit, companies are now looking to achieve those high levels of accuracy that had previously been deemed to be unattainable, be that due to the paucity in reconciliation options available or through the deployment of AI in a feasible and realistically useful way.

5. Coming to RegTech again, how do these companies operate? Is there too much automation or is there a fair share of human intervention as well?

When you plan your solution around reporting, you must carefully consider the success criteria for the    regulation  itself, as well as the methodology that your firm wishes to utilise. It is at this stage, and arguably on an ongoing basis, that the 'human' element remains paramount to monitoring and assessing the firm’s performance. As a result of that metric-driven approach, with sufficient oversight from compliance, you can now run your risk assessment based on what can be automated and what can not be reasonably expected to be run and have the necessary success rate. Each firm has a different view on this, with some being able to run an almost fully automated solution.

6. There are many RegTech companies now. How is MAP FinTech different?

MAP FinTech is at its best when matching technology and compliance. This combination has allowed us to deliver successful RegTech solutions for the regulatory industry and differentiate ourselves from the competition. All our solutions are offered under our award-winning Polaris platform, which is a centralized tool that allows for the configuration, management and monitoring of all our RegTech products via a single, user-friendly online portal. Additionally, our solutions use existing client data sets to deliver a seamless reporting vehicle, one that guarantees transparency and efficiency. Plenty of our success stems from our ability to effectively and agilely combine the work being carried out by both our compliance and technology divisions. This teamwork has allowed us to better cater to the rapidly changing demands posed by the global RegTech world. Likewise, it has made it easier for us to provide our clients with fully customizable and targeted solutions that cover all their reporting needs. This flexibility and ability to quickly adapt to a dynamic regulatory environment, matched with our unwavering commitment to customer service and innovation, has allowed us to be one step ahead of the competition.

7. Lastly, can you tell us what is the next for MAP FinTech? Do you have big plans for the near future?

As a follow-up to what has been an outstanding year for MAP FinTech, we resolve to continue delivering exceptional, innovative and one-of-a-kind solutions to our clients and partner firms. This includes our best-in-class RegTech tools and reporting services, which allow our loyal clients to meet their regulatory reporting requirements and achieve the best results. We also plan to broaden our integration with international TRs, ARMs and NCAs, and to help our customers meet their regulatory reporting obligations in a timely and efficient way. These integrations simplify the move when a TR or ARM ceases to provide the services a client originally signed up for. Moreover, it is particularly important for us to maintain and improve the quality of our support services, which have proven to stand out from those traditionally offered. Additionally, we will introduce new client support technologies to improve the efficiency and quality of the two most important processes in RegTech projects: initial onboarding and day-to-day support.

Regtech companies have gained a lot of attention lately as demand for tier services keeps rising. The success of these regtechs has become inevitable with the changing and increasing regulatory requirements and the globalization of financial services companies.

Finance Magnates recently had the opportunity to sit down with the MAP Fintech CEO, Panayiotis Omirou, and discuss the overall industry trends, regulations and much more.

1. What exactly is regtech, and what does it entail?

Simply put, regulatory technology or RegTech refers to any technology that helps companies comply with their regulatory requirements. Cutting-edge technologies such as artificial intelligence, big data, machine learning, etc., are used to ensure that companies are more effective in reaching regulatory compliance. RegTech solutions can provide great value to businesses in the financial industry looking for assistance with regulatory reporting, risk management, identity management,    compliance  and transaction monitoring. By embracing RegTech, companies can quickly fulfil their various regulatory obligations and focus more resources on the revenue-generating processes of their business.

2. Why did the demand for regtech firms explode suddenly?

The increasingly complex regulatory environment, along with the heavy penalties issued by regulators in the last couple of years, explains why there has been a marked increase in demand for regulatory technology solutions. However, it is fair to say that the demand for RegTech solutions is not new. In terms of trade level reporting, this market is rather mature with regards to MiFIR and EMIR. Nevertheless, the emergence of firms using technology for trade surveillance and monitoring functions has grown. For instance, as a result of Brexit and the COVID pandemic, organizations are looking to automate solutions and ease staffing costs. Brexit has also drawn attention to firms now operating under a different set of regulations. Reporting requirements for firms that want to operate in both the EU and the UK have become more stringent as the FCA and ESMA have naturally diverged. Besides this, the individual position of each regulatory body in continental Europe has had a dramatic effect on their ability to attract companies into their areas of control. Hence, regulatory arbitrage has become a legitimate concern.

3. How do you think the regulatory space has changed for financial services firms over recent years?

RegTech has shifted from being a best effort to adhere to the spirit of the rules under the circumstances to a more comprehensive effort to be as accurate as possible. It is a fact that Brexit has polarised both European and UK regulators into a position of 'Coopetition', whilst attempting to make their specific markets more attractive to outside investment. Jurisdictions across the region must endeavour to show probity with regards to their own regulatory rulings, whilst at the same time not making these same rules a barrier to trade or entry. As such, one can see that there is a balance to be struck. For instance, the suggestions around the usefulness of RTS27/28 is just one example of this conundrum.

4. As you are working very closely with financial services companies, how do you think they are handling the changing regulatory positions?

As alluded to previously, they are taking it seriously in light of the recent geo-political movements in Europe. Currently, there are both more things to be aware of, as well as decisions to be made regarding participation within those very markets. Implementing solutions that are transparent are paramount. Albeit, companies are now looking to achieve those high levels of accuracy that had previously been deemed to be unattainable, be that due to the paucity in reconciliation options available or through the deployment of AI in a feasible and realistically useful way.

5. Coming to RegTech again, how do these companies operate? Is there too much automation or is there a fair share of human intervention as well?

When you plan your solution around reporting, you must carefully consider the success criteria for the    regulation  itself, as well as the methodology that your firm wishes to utilise. It is at this stage, and arguably on an ongoing basis, that the 'human' element remains paramount to monitoring and assessing the firm’s performance. As a result of that metric-driven approach, with sufficient oversight from compliance, you can now run your risk assessment based on what can be automated and what can not be reasonably expected to be run and have the necessary success rate. Each firm has a different view on this, with some being able to run an almost fully automated solution.

6. There are many RegTech companies now. How is MAP FinTech different?

MAP FinTech is at its best when matching technology and compliance. This combination has allowed us to deliver successful RegTech solutions for the regulatory industry and differentiate ourselves from the competition. All our solutions are offered under our award-winning Polaris platform, which is a centralized tool that allows for the configuration, management and monitoring of all our RegTech products via a single, user-friendly online portal. Additionally, our solutions use existing client data sets to deliver a seamless reporting vehicle, one that guarantees transparency and efficiency. Plenty of our success stems from our ability to effectively and agilely combine the work being carried out by both our compliance and technology divisions. This teamwork has allowed us to better cater to the rapidly changing demands posed by the global RegTech world. Likewise, it has made it easier for us to provide our clients with fully customizable and targeted solutions that cover all their reporting needs. This flexibility and ability to quickly adapt to a dynamic regulatory environment, matched with our unwavering commitment to customer service and innovation, has allowed us to be one step ahead of the competition.

7. Lastly, can you tell us what is the next for MAP FinTech? Do you have big plans for the near future?

As a follow-up to what has been an outstanding year for MAP FinTech, we resolve to continue delivering exceptional, innovative and one-of-a-kind solutions to our clients and partner firms. This includes our best-in-class RegTech tools and reporting services, which allow our loyal clients to meet their regulatory reporting requirements and achieve the best results. We also plan to broaden our integration with international TRs, ARMs and NCAs, and to help our customers meet their regulatory reporting obligations in a timely and efficient way. These integrations simplify the move when a TR or ARM ceases to provide the services a client originally signed up for. Moreover, it is particularly important for us to maintain and improve the quality of our support services, which have proven to stand out from those traditionally offered. Additionally, we will introduce new client support technologies to improve the efficiency and quality of the two most important processes in RegTech projects: initial onboarding and day-to-day support.