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. However, as regulatory oversight increases in areas such as cybersecurity and data protection, increasingly, regtech will not be limited to the banking and fintech sectors. Circling back to a 2022 episode, 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.
This episode is also available on SoundCloud, Apple Podcasts, Spotify and Amazon Music!!
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).
However, although the impetus for regtech was the banking and financial services sectors space, principles and practices are becoming increasingly relevant and applicable in other sectors and more broadly in organisational operations. A good example of the latter is to support data protection and cybersecurity compliance obligations where increasingly, regulatory and reporting requirements need to be satisfied.
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
When Jennifer was interviewed on regtech in 2022, the region was abuzz with fintech and the opportunities that could be leveraged. At the time, regtech was an underdeveloped segment in the Caribbean region, and from all reports, it has not gained much traction. 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, and in revisiting this conversation with Jennifer, it is likely that to varying degrees, organisations could benefit from integrating regtech principles and practices into their operations, to assist them with compliance and reporting. Two big areas that have become increasingly applicable to organisations – regardless of industry – are data protection and cybersecurity.
If this episode on regtech is considered through the lens of data protection and cybersecurity, there are considerable synergies that emerge, such as:
- Regtech solutions can help automate tasks like Know Your Customer (KYC) checks, data encryption, and access control to protect customer data
- Regtech solutions themselves need to be secure, and so the link with cybersecurity
- Regtech tools can help companies stay up-to-date on new requirements and automate compliance processes, especially since data protection and cybersecurity regulations are constantly evolving.
Below are key questions posed to Jennifer that drove our conversation.
- 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 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 your thoughts!
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Also, if you or a member of your network is interested in joining us for an episode, do get in touch.
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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; Gerd Altmann (Pixabay); Freepik; xdfolio (Pixabay)
Music credit: The Last Word (Oui Ma Chérie), by Andy Narrell
Podcast Editing Support: Mayra Bonilla Lopez
