An overwhelming majority (85 per cent) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020, as the wave of new regulation a decade after the financial crisis shows no sign of abating.
Intertrust surveyed over 500 executives covering the asset management, corporate, capital markets and private wealth sectors, finding that 40 per cent said their company struggled with a skill shortage in RegTech and compliance.
The administrative services firm also found that private equity professionals predicted the highest levels of demand for RegTech solutions, with 97 per cent expecting to see a continued rise. This was followed by those operating in the capital markets (92 per cent) and corporate services (86 per cent) sectors.
Given the deficit in RegTech expertise and resource, most organisations are turning to external organisations for assistance. Respondents stated the best source of support is traditional administration services providers, combining regulatory experience with tech-based solutions (31 per cent). This is ahead of FinTech disruptors (23 per cent), law firms with regulatory experience (16 per cent), audit firms (14 per cent) and management consultancies (eight per cent).
Stephanie Miller, chief executive at Intertrust, said that following the recent onslaught of “game changing” tax and regulatory regimes such as GDPR, MiFID II and DAC 6, firms have become increasingly reliant on RegTech solutions.
“RegTech has evolved from being considered a very niche concept reserved for those big enough to support the investment to becoming a mainstream solution for every financial institution no matter the size or budget,” he stated.
“This development is mostly driven by the availability of third party providers providing cost effective expert solutions allowing access to the best RegTech without requiring the capital investment,” continued Miller. “In terms of industry evolution RegTech is still in its infancy but, as our research shows, we are beginning to see some trends in the emergence of certain preferred partners.”
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