Introducing RegTech Insight

RegTech Insight Briefs

Clausematch Enters Italy with Banca Intesa Sanpaolo Partnership

Following a meeting at a FinTech Innovation Lab hosted by Banca Intesa Sanpaolo, the bank has implemented implemented the ClauseMatch platform within its Cost Management Office governance area. An advanced online document management and collaboration solution, the space is designed to optimise and streamline the process of creating and managing intra-group service contracts.

ACA Compliance Opens New Office in Birmingham

GRC tech specialist ACA Compliance has expanded its European presence with an office in Birmingham, UK. Key to the services offered from the new location will be ACA’s Analysis and Review Centre (ARC). The ARC helps to reduce the workload of Chief Compliance Officers (CCOs) and in-house compliance teams by allowing them to pass on executional regulatory responsibilities to ACA. According to Thomson Reuters, over a third (36%) of global financial services firms now outsource all or part of their compliance function.

SmartSearch Wins Equity Investment

RegTech software provider and AML specialist SmartSearch has received a growth equity investment from Marlin Equity Partners, a global investment firm with a substantial software funding track record. SmartSearch enables organisations to carry out AML checks without requiring clients to provide identity documents. Its automated verification approach allows individual AML checks to be processed in less than 30 seconds while business checks take less than three minutes.

It claims to be the only organisation in the UK with the ability to verify individuals and companies in the UK and internationally all in a single platform via a browser or API, with full Sanction, PEP and adverse media screening and then ongoing monitoring.

FSB publishes UPI governance arrangements

The Financial Stability Board (FSB) has published a report on governance arrangements for the Unique Product Identifier (UPI). The UPI will uniquely identify the product involved in OTC derivatives transactions reported to trade repositories. This will help authorities aggregate data on OTC derivatives transactions by product, allowing the effective use of OTC derivatives trade reporting data to help authorities assess systemic risk and detect market abuse. The Legal Entity Identifier Regulatory Oversight Committee (LEI ROC) will become the International Governance Body for the UPI and Unique Transaction Identifier (UTI). The UPI Technical Guidance should be implemented by Q3 2022.

BIS Releases Basel III Monitoring Report 2019

The Basel Committee’s latest Basel III monitoring exercise shows that on a fully phased-in basis, the capital shortfalls at the end-December 2018 reporting date are €23.5 billion for Group 1 banks at the target level. These shortfalls are almost 75% smaller than in the end-2015 cumulative QIS exercise, thanks mainly to higher levels of eligible capital. For Group 1 banks, the Tier 1 minimum required capital (MRC) is expect to increase by 3% following full phasing-in of the final Basel III standards relative to the initial Basel III standards. This compares with an increase of 3.2% at end-2017. On average, at end-June 2018, the total change in Tier 1 MRC at the target level was higher at 5.3% for Group 1 banks. This higher increase was largely driven by the higher market risk impact prior to the application of the recalibrated 2019 standard. The final Basel III minimum requirements are expected to be implemented by January 1, 2022 and fully phased in by January 1, 2027.

FCA Finds MiFID II Research Unbundling Rules Working Well for Investors

Multi-firm review findings published this week by the FCA has found that, post-MiFID II, most asset managers have chosen to pay for research from their own revenues, instead of using their clients’ funds. Firms have also improved their accountability and scrutiny of both research and execution costs, including where firms have chosen to charge research costs to clients. This has resulted in investors in UK-managed equity portfolios saving around £70 million in the first six months of 2018 across a sample of firms. The review also indicated that research budgets have fallen by 20-30%.

Firms Still Uncertain About Libor Transition

Although four out of five financial providers have Libor transition plans in place, just 18% say their plan is mature, while only one in five say they are operationally ready for the change – according to the Accenture 2019 Libor Survey. Almost half (41%) do not feel they have a unified and consistent approach to transition and remediation, while two in five believe that regulatory uncertainty and lack of clarity are hampering execution of their remediation efforts.

RegTech Spending to reach $127bn by 2024, Says Juniper

New data from Juniper Research forecasts that the value of RegTech spending will exceed $127 billion by 2024, up from $25 billion in 2019. This growth will be driven by a dramatic rise in the automation of resource-intensive tasks, such as those involved in KYC (Know Your Customer) checks and increasing use of AI in transaction monitoring. Global regulatory compliance costs are also set to soar, from just under $278 billion to more than $316 billion over the next five years. In Europe, this growth is likely to be driven by regulatory divergence post-Brexit which, while disruptive, could create new opportunities for RegTech.

Luxoft Forms Strategic Alliance with Fenergo

Luxoft, a DXC Technology company, has become a Global Platinum Member of client lifecycle management (CLM) specialist Fenergo’s partner ecosystem. Luxoft will offer Fenergo’s client community members professional consulting services to enable the rapid systems integration and deployment of Fenergo’s platform and suite of digital capabilities. The Fenergo ecosystem currently consists of 300 global organisations, of which just three are platinum members.

Compliance.ai Launches Premium Content

Compliance.ai has launched Premium Content, a new offering to help compliance professionals keep up with banking and financial regulations. The service provides users with access to contextualized regulatory subscription content including legal interpretations of regulations, publications from law firms, compliance manuals, guidance from content publishers and industry experts, online compliance training as well as subscription based content relevant to banks and financial institutions. It also offers a curated listing of providers from law firms, advisory services and content publishers; and plans to correlate with tasks and workflows soon after launch.