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Author: Leen Cuypers

Wednesday, June 28, FinnoLux hosted an event focussed on ‘RegTech Solutions for the Fund Industry’ a collaboration with Enterprise Ireland, and the International RegTech Association.
The purpose of the event was to the opportunity RegTech brings to the fund industry. As ‘digital enablers’, at FinnoLux work, on a daily basis, with clients in the financial sector, defining with them their digital strategy, executing the delivery roadmap, to enable them to take full advantage of the opportunities available.

We believe the use of technology, especially RegTech, has an exceptionally positive impact on the organisation and the industry, when those technologies are applied which strengthen instead the business. When a digital strategy is developed and executed in line with the overall business strategy. For those who are not aware, RegTech is the application of technology to solve challenges relating to regulation, compliance and supervision. RegTech, has however, a value beyond the area of compliance. This is driven by the value proposition of RegTech itself which is not one of disruption but is one of strengthening.

One of the key take-away messages from the event is that RegTech will play an important role in the defining of the future of the Fund Industry in Luxembourg.

It became evident that the future of the industry depends upon the industry’s ability to redefine themselves by applying RegTech. Regulatory Technology is the application of technology to facilitate compliancy with regulations. While one of the values what RegTech brings is to simplify and improve compliance, the wider benefit is far larger and acts as a stimulus to bring automation to the processes.

RegTech’s Value Proposition

In our daily interactions with the Fund sector and more generally with the financial industry, we understand that the ever-increasing regulatory burden and complexity, make it harder to manage costs and human errors are more likely to occur. Margins are under pressure due to competition from new market entrants, especially those in Asia. RegTech allows the companies to avoid spending millions on compliance projects and instead to shift their focus to products and services which can truly differentiate them. By introducing RegTech, companies free-up time and resources to enhance regulation and compliance while strengthening the industry and protecting customers.

By freeing up both people and money, the companies can focus on developing the financial industry of the future. The annual spend of firms in the financial sector on regulatory compliance ranges between 10% and 15% of their annual revenues, with much of the work performed manually. Imagine if a large portion of this could be spend on the business itself.

A second main take away from the event, is that RegTech opens the door to collaboration, as we all know ‘being compliant’ isn’t regarded as a differentiator. We focused specifically on Luxembourg and Ireland as the two main Fund Centres in Europe. It was recognised there is an opportunity to collaborate and to present a strong European front. The openness and willingness from the industry – the Fund industry, as well as the RegTech companies – to work together across borders was shown during a round table discussion. Laurent Marochini, Chair of the ALFI working group on Blockchain and Cryptocurrencies mentioned: ‘Luxembourg and Ireland are competing for the end customer but are not in competition in terms of technology or compliancy. We should find ways or niches to work together. We don’t have the knowledge everywhere, we cannot be the best everywhere. We can exchange with the key people in Ireland. We speak the same language, we are used to speak English and the language of the client. We need to find out how we can progress together.’  From the RegTech companies’ perspective, CEO of Luxembourg-based governance.io Bert Boerman added ‘we are already collaborating across borders as our different solutions are in many cases very complementary and together deliver real solutions to the customer’s many challenges’.

This openness is a major step forward in building a strong European Industry. The different Fund Centres can compete for their end customers, whilst simultaneously building a strong framework in which they can thrive. If we would succeed in doing so, we wouldn’t have to look to the United States to see what they are doing and how they are doing it – regardless the cultural and regulatory differences – but we would be able to build on and tap into the European capabilities, talent and rich innovation history.

Luxembourg’s opportunity

Dr. Subas Roy, global chair of International RegTech Association (IRTA), former Global RegTech Lead at Ernst & Young and reputed as being one of the ‘famous five of RegTech’, while presenting in Luxembourg this week, explained the RegTech industry is rapidly growing, with an estimated size of $20bn by 2020. ‘That is a huge opportunity, at a global scale, for Luxembourg too, to be the leading pioneer of RegTech in the Assets Management and Fund sector, to help create a global centre of excellence, an innovation zone that can help further foster its current 4% economic growth for the years to come!’

One of the International RegTech Association’s core missions is to work with the financial industry, including the Funds sector, to bring the solutions they need. Take for example the six RegTech companies who presented their solutions during the event in Luxembourg this week – these solve real problems that the people in the room actually experience every day. IRTA is furthermore dedicated to build Centres of Excellence on a global scale, where prestigious academics, the industry, regulators and all other stakeholders meet and work together to find solutions that will strengthen the industry.

Matt Elton, CEO of Luxembourg-based FinnoLux, and Vice-chair and co-founder of the IRTA, has, as a true visionary understood RegTech’s powerful value proposition for the Luxembourgish and global Financial Industry. He acknowledges the tremendous opportunity Luxembourg has in strengthening and shaping the very industry in which it is the most successful, by leading the way in the field of RegTech. Matt elaborates, ‘The groundwork which has been laid by Luxembourg’s leading academic institutions and, in particular, SnT’s cutting-edge research in machine learning, artificial intelligence, machine readable regulation, … reinforces Luxembourg’s position, as these technologies are directly applicable to RegTech. It is by the highly collaborative model between academia and the private sector that gives Luxembourg this wonderful opportunity to remain in the lead. Moreover, it is worth stating that the Luxembourg Institute for Science and technology have for several years been developing a capability in RegTech itself. This positions Luxembourg as the ideal place, not only to develop RegTech capabilities but also to apply them to one of our strongest industries. By using the talent and capability which we have and applying it to our industry, we can enable Luxembourg to remain a leading financial centre whilst at the same time becoming one of the world’s leading RegTech hubs’.

FinnoLux is focussed on the creation and execution of digital strategy in the financial sector, of which automation of mid- and back-office are key parts. As a digital enabler, we make digital ‘happen’ for our customers, assisting them in reinvigorating their business and enabling them to reduce costs and inefficiencies and instead focussing on the true differentiators. Our deep understanding of the industry value-chain as well as our true business experience puts us in the perfect position to align your digital strategy with your future perspectives.


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08/06/2017by Matt Elton0

We would like to invite you to ‘RegTech Solutions for the Funds Industry to be held on 28 June 2017 at Hotel Le Royal, Luxembourg.

This event is hosted by FinnoLux, Enterprise Ireland and the International RegTech Association (IRTA) with support from the Irish Embassy in Luxembourg, and is the first dedicated presentation of RegTech solutions for the Funds Industry in Luxembourg.

Starting with a business breakfast, the event will take place in the morning of Wednesday, 28 June, at the Hotel Le Royal, 12 Boulevard Royal, Luxembourg, and will show a first-hand picture of RegTech solutions and explore possible partnership opportunities for successful digital transition.

The seminar will feature a panel discussion with prominent speakers from the RegTech industry.

Attendance is free of charge, however as spaces are limited, registration is mandatory, register here:
https://www.eventbrite.com/e/regtech-solutions-for-the-fund-industry-tickets-35206928872

Agenda:

08:00                    Breakfast

9:00-9:15             Welcome address H.E. Peadar Carpenter, Irish Ambassador to Luxembourg

9:15-9:40             Keynote Subas Roy, Global Chair International RegTech Association: The opportunity RegTech brings to the Fund Industry to increase efficiency and reduce regulatory risk.

9:40-10:30          Showcase of RegTech Solutions for the Funds Industry

10:30-11:20        Panel Discussion moderated by Paul Barreveld (Enterprise Ireland)
Laurent Marochini (Chairman ALFI Blockchain & Cryptocurrency Working Group)
Matt Elton (Vice chair IRTA)
Bert Boerman (CEO governance.io, winner of the 2016 FinTech Lion Awards)
– Additional speaker tbc

11:30                     Networking

Companies presenting their solutions include:

Gecko Governance Blockchain technology to manage regulatory and governance compliancy
FundRecs  Fund reconciliation software
AQMetrics Analytics and regulatory reporting & risk monitoring
Risk System Real time Risk engine to calculate various risk exposures
Corlytics Regulatory Risk Intelligence
FundCalcs Complete Automation of back office calculations and data flows

We look forward to seeing you at the event!