Regulatory technology (or regtech) is expected to be worth over USD 87 billion by 2028, but it is an underdeveloped fintech segment in the Caribbean region. Regtech expert, Jennifer Potter, gives us a primer on regtech, and discusses, among other things: the other industries, besides banking and financial services, in which regtech can be applied; how regtech can improve the customer experience regarding the Know-Your-Customer (KYC) rules and anti-money laundering (AML) compliance obligation; and key things organisations should consider before they decide to integrate regtech into their operations.
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There are a number of activities that fall under the fintech umbrella, such as digital lending, payments, cryptocurrency, open banking, regtech and digital wealth management. Although cryptocurrency and open banking, among others, have been getting considerable attention, particularly those that leverage blockchain technology, such as non-fungible tokens and distributed autonomous organisations, in this week’s podcast episode, we are focussing on regtech.
Regulatory technology, more commonly known as regtech, is a category of software applications that support regulatory compliance and reporting. Since the global financial crisis of 2008 and 2009, the banking and financial services sector has come under more stringent regulation, thus increasing the emphasis on compliance and reporting, and the emergence of regtech.
The regtech industry is growing. Depending on which resource you reference, it could be worth up to USD 87.17 billion globally by 2028, with a compound annual growth rate of 23.92% (Source: PR Newswire).
Many Caribbean countries already have an international financial services industry that they would want to protect and grow. Regtech is an area that could also be developed to augment and complement the existing service offerings.
Introducing our guest
Jennifer Potter is a strategy-focused business leader based in the British Virgin Islands (BVI). She is on a mission to help businesses thrive through transformation by supporting executives on the path of growth and acquisition. In addition, she designs innovative fintech and regtech solutions, optimising risk mitigation and efficient compliance management, particularly in sectors with increasingly complex regulatory and compliance obligations. As a subject matter expert, she has advised businesses on fintech, regtech, digital money solutions, and corporate operations.
For twenty years, Jennifer managed operations and development as a senior executive with the BVI financial services regulator and is credited with successfully leading multiple development projects above USD 1 million. She holds master’s degrees in Law and Business Administration and a professional designation in Governance, Risk and Compliance. She is currently Head of Operations, Risk, and Compliance for George Henry Partners LP, a legal and professional services firm in the British Virgin Islands.
Insights into our conversation
This conversation with Jennifer is a primer on regtech, since it still appears to be an underdeveloped segment in the Caribbean region. However, there is considerable potential for it to improve local banking and financial services, and the associated customer experience, with deeper integration of the regtech-related systems across organisations.
Having said this, it is important to emphasise procuring and integrating a regtech platform is an investment, not only in money but also in manpower – evidenced by the growing proportion of the total staff assigned to compliance and reporting. Hence, as Jennifer discusses, organisations need to be clear about the benefits they want to realise from leveraging regtech, and may need to explore options to make it more cost-effective.
- To start us off, tell us a bit about yourself, and how you got into regtech.
- What is regtech and how does it work?
- How is regtech useful, and besides banking, what are some of the other industries and ways it is useful?
- Two areas in banking where regtech can be helpful are Know-Your-Customer (KYC) rules and anti-money laundering (AML) compliance obligations. How might that work, especially when in the region, we are still being asked to supply proof of address, proof of income, references, etc., to open an account or complete certain transactions?
- To what degree have traditional banks and financial institutions in the Caribbean region embraced regtech?
- There are still numerous attorneys and law firms across the Caribbean region that are hesitant, or even resistant, to fintech, and the evolution that is being ushered by blockchain technology. What are your thoughts on this?
- Are there any legal or regulatory impediments that currently exist in the region that would hinder regtech development?
- What are some of the key things organisations should consider in order to decide whether they should pursue regtech?
- Within the Caribbean region, where do you see the opportunities for regtech (adoption and or integration)?
We would love to hear from you!
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Let’s make it happen!
Select links
Below are links to some of the organisations and resources that either were mentioned during the episode or otherwise, might be useful:
Images credit: J Potter (LinkedIn); Monito – Money Transfer Comparison (flickr); xdfolio (Pixabay); Pix4Free
Music credit: The Last Word (Oui Ma Chérie), by Andy Narrell
Podcast editing support: Mayra Bonilla Lopez
