Last month, we hosted a panel discussion at the inaugural AMTech Day (APAC) in Sydney, moderated by Richard Ayres, our Head of Business Development, APAC. The panel, including participants from Northern Trust, KOR Financial, and Droit, explored ways to save time, money, and headaches with regulatory technology.
The panel discussion concluded that regulatory scrutiny for the buy-side is increasing, meaning that, for many COOs, this will require a shift in mindset to a proactive approach to compliance. To meet this challenge, firms will need technology partners that can help them put the fundamental building blocks, such as data architecture and control frameworks, in place. Automating compliance not only saves costs but can also be a growth engine, enabling firms to respond more quickly to opportunities.
Here are the key takeaways from the discussion
1. Ownership, Accountability and Proactive Engagement: With the removal of safe harbour provisions, firms must take greater accountability of their regulatory obligations and the data submitted on their behalf by partners. This requires a clear understanding of who owns what within the organization regarding compliance, technology, and vendor management.
The panelists also emphasized the importance of anticipating and preparing for regulatory changes rather than reacting to them. This includes staying informed about upcoming regulations in different jurisdictions and starting the preparation process early.
2. A Data-Centric Approach: Effective regulatory compliance hinges on robust data management and governance. This involves normalizing data, establishing a single source of truth, and investing in data reconciliation processes to ensure accuracy and completeness in reporting.
3. Integrated Compliance: Compliance should not be a siloed function. The discussion highlighted the need to break down internal silos between trading, operations, risk, and compliance teams and to integrate compliance considerations earlier in the technology stack so that errors are identified upstream, where they are cheaper to remediate.
4. Strategic Partnerships and Collaboration: Engaging with trusted vendors and actively participating in industry working groups are crucial for navigating the complexities of regulatory compliance. Collaboration helps in understanding regulatory expectations, building robust solutions, and mitigating the risk of misinterpreting regulations. Firms can’t simply outsource their problems to a vendor.
5. Beyond a Burden: Compliance as an Opportunity: While compliance involves costs, the panelists suggest that a strategic approach can transform it from a mere burden into a driver for operational efficiency, improved processes, and even identifying new business opportunities. By leveraging the data and technology implemented for compliance, firms can gain valuable insights and enhance their agility.