International Association Aims to Promote Regtech as a Thing

By Gregory Roberts

An international cadre of financial technology professionals has formed an association to focus attention on the application of fintech to regulatory compliance: regtech.

“The purpose of the organization is to promote regtech as a profession globally,” Subas Roy, the chair of the International Regtech Association (IRTA), told Bloomberg BNA in a telephone call from his base in London. Roy is the former head of regtech for EY, the Big Four accounting firm.

IRTA went public online in May. The group plans to host conferences, conduct research, establish collaborations with governments and universities, and undertake other activities to advance its goals. The organization hopes to attract backing from financial institutions and technology companies.

“We want a cooperative ecosystem, where the regulators and the banking industry can work together,” Roy said.

IRTA has established chapters in a dozen countries — including the U.S. — and soon intends to add 18 more, Roy said.

“Regtech is about bringing cutting-edge technology to the regulatory and compliance process to transform it,” IRTA board member Jo Ann Barefoot, a fintech consultant, former deputy U.S. comptroller of the currency and cofounder of the Boston-area startup Hummingbird Regtech, said. “We can simultaneously improve the public outcome and cut the costs.”

Regtech has emerged as a term comprising an expanding array of applications as financial institutions struggle with the mushrooming costs of compliance with regulations since their multiplication after the 2007-08 crisis.

In one high-profile manifestation of the phenomenon, IBM in September acquired Promontory Financial Group, an international consulting firm, and announced it would combine Promontory’s expertise with the artificial-intelligence and machine-learning capabilities of IBM’s Watson computing platform in developing regtech solutions.

One area seen as a fertile field for regtech is in compliance with anti-money-laundering (AML) requirements. Banks and other institutions hope to refine and accelerate pattern recognition as cues to violations in their processing of transactions in accord with AML regulations.

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