experteq values digital innovation, technology advancement and digital leadership. In our “5 in 5” series, experteq spends five minutes with inspiring leaders who are making a difference to achieve digital innovation, discussing five critical questions of the now.
Compliance is one of the top risks for businesses today. While Australian business leaders have become increasingly aware of compliance and its importance to their organisations, the experteq Compliance Index 20201 found that there is still room for improvement when ensuring effective compliance management. Common challenges include constraints in resources and skills capability — but strategic partnerships with regtechs, i.e. companies that provide regulatory technology solutions, can help address these.
Deborah Young is the founding CEO of The RegTech Association, a global non-profit industry member body focussed on accelerating the adoption of regtech solutions and creating a global centre of excellence. With over 20 years’ experience as a senior executive across financial services, Deborah sits on several Australian federal and state government regulatory committees and advisory groups.
Deborah talks about some big trends in regtech, and how leaders at the very top need to spearhead an integrated approach to risk management and digital innovation.
experteq: What are the biggest trends you are seeing in your member base when it comes to digital opportunities in Australian businesses?
DY: Perhaps the most significant trend in regtech right now is the changing attitudes and embracing of regtech to solve institutional compliance and regulatory challenges from the buyers.
Our most recent member research is showing a trend towards buying rather than building technology. This is evidenced by our recent joint three-part risk program run by a Big 4 bank who were looking to assess the best regtech in the world against their three problem statements.
The opportunity for regtech is certainly unfolding currently and this crosses boundaries to other industry segments outside of financial services. The recognition that regtech has the capacity to protect consumers, give more transparent and real-time information to businesses (small and large) and give the Government access to tools and resources to meet the needs of their citizens is right up there in terms of trends now.
For example, we have seen increased interest in Government as a buyer and influencer of regtech, and we are starting to see some new members in the area of simplifying obligations around industrial relations as a new area for focus.
Recent data from our members suggests that government, healthcare, education and telecommunications are areas to watch at the moment and are where good opportunities for regtechs may be found.
experteq: What are the risk and compliance obstacles leaders will face to unlock these digital opportunities?
DY: Organisations must be aligned with an integrated approach to risk management and risk mitigation. It must be led from the top of the institution, from the board and leaders down; must extend through to digital innovation, IT, procurement and agility to onboard innovative technologies. Of course, this requires education and a very contemporary approach. We are seeing signs that organisations are taking a more holistic approach to their risk management that has regtech front and centre.
Australian leaders should take comfort that they have the very best seat in the house when it comes to regtech. Australia is the third-largest player in regtech in the world behind the US and UK.
experteq: What should business leaders prioritise when it comes to digital transformation considering risk and compliance challenges?
DY: Business leaders should reflect and ask themselves whether they have provided the right digital innovation strategy for their leadership teams and employees with the very best tools available to manage the risks and equip them to make better business decisions. This last part is important. These are not just risk management tools; these can also help you make more informed decisions that can benefit your customers and stakeholders. Some questions to think about regarding digital innovation: do you know what these regtechs tools are and what they are capable of? Do boards and management teams have access to this information?
experteq: How can leaders balance their regulatory obligations while accelerating digital change?
DY: Most existing regtechs were founded by experienced ex-industry practitioners. What this means is that these founders have been in the very shoes of the leaders that they are helping. They are offering a digital solution that helps manage regulatory or compliance obligations through the use of efficiency-enhancing tools that will bring superior transparency and productivity, leading to better decision-making and a safer place for consumers. Their impact in terms of efficiency might be best illustrated with this use case: 1,800 hours to manually align regulatory obligations using people, in comparison to 2.5 minutes doing the same task with a regtech tool’s artificial intelligence.
experteq: What has been your own digital “aha” moment over the last several months?
DY: Seeing how an entire planet of people were able to pivot online in a matter of days, change decades-old practices and old ways of working to a collaborative, authentic and digital experience. Having technology has allowed us to operate from anywhere, anytime with more flexibility, which is reshaping how we will work, interact, manage risks and improve governance in the future.
As observed in the experteq Compliance Index 2020, while some organisations tap external partners periodically to assist with their compliance obligations, very few are engaging partners to manage compliance in an end-to-end, holistic manner. experteq CEO Shane Baker said, “Strategic partnerships, smart and intuitive technology, and the use of data and analytics will help navigate the compliance landscape.”