Confluence, the software firm, is predicting that the rise of regulatory IT in 2017 will trigger off a transformation of the asset management back office. Better data management models, combined with innovative software, will finally begin to cause some long-sought improvements to operating models by automating them.

A subset of financial information technology or FinTech, RegTech consists of software that expedites regulatory requirements. For asset managers, the consultancy believes that it will be particularly useful in the management of complex regulatory data and compliance with condensed reporting cycles.

Confluence, no doubt in an effort to drum up business, predicts three major changes in the asset management industry next year.

• The RegTech initiative of regulators in the UK will spread all over the world as firms turn to disruptive technologies to meet new regulatory requirements.
• RegTech's promise will be the tipping-point in firms' quest for efficiency through automation in the back office.
• Asset management firms that embrace RegTech will be better placed for longer-term success than others as the industry moves into the era of digitalisation.

Much of this appears to be self-serving bluster but it is true that the 'RegTech' phenomenon, especially in the global adoption (outside the United States) of the British 'sandbox' idea, has taken hold quickly. The first reference to RegTech came in a report from HM Government's chief scientific advisor in March last year. After the Financial Conduct Authority co-opted the term in late 2015 in a plea to the European market for input about how to use IT to solve regulatory problems, RegTech began to take on a life of its own. The Hong Kong Monetary Authority and Hong Kong's Securities and Futures Commission said in November that they saw major opportunities for IT to help firms meet their regulatory obligations. Regulators in Australia, Canada, Japan and Singapore have echoed their claims, according to Confluence.