In this article Guy Harrison, the head of Dow Jones Risk and Compliance, discusses his observations about the effects that the Coronavirus epidemic is having on regulatory compliance around the world.

"I'd like to see a set of open standards or priciples that any tech provider should meet. There should be some sort of certification or kitemark, then firms would know that the regulator is going to be all right about this-or-that piece of software that they might want to write.

"We see a lot of unwarranted hype around these new technologies. I'd like to see more guidance from the regulator about what is and what is not an effective solution."

Kapoor, however, thought that the virus had indeed spurred regulators on to greater efforts in this area: "The acceleration of digital transformation is causing trouble because of people having to work from home, people paying in things that aren't cash, the general digitisation of the business, exposure to more fraud, the fact that personal and professional lives have been merged, and the fact that data provision is in danger because of fraud, so regulators are making more of FinTech/RegTech."

The immediate future of RegTech

When asked about the way in which RegTech was evolving, Harrison said: "We're seeing a trend towards complete solutions (a naff term). Financial firms used to 'pick and mix' the compliance software that they used, taking a KYC system from one company, an onboarding system from another, IT support from another etc, but they're fed up with that and in any case it carries a high overhead. They want someone who can offer genuine customer service – it need not be a consultant or a professional services firm. They want to parter with a firm with a good grasp of compliance."

Compliance Matters remarked that this sounded like a ringing endorsement of compliance consultancies large and small such as ACA Compliance, Bovill, CCL, Complyport, Protiviti, SimplyBiz etc which are, these days, in bed with/owners of compliance software companies. Harrison agreed.

"Yes. They’re all becoming software firms anyway. They're moving more and more into product. And many software firms are turning more and more into consultancies. I agree that they're good, as long as they're not giving objective advice one minute and then pitching their own software or data the next."