Integration and ‘platform approach’ will guide compliance into new age: MIntegrity

While technology’s role in compliance is becoming more prominent, advisers and brokers are still looking for clarity on what vehicles will carry that technology.

While there has been an astonishing increase in the number of financial services professionals looking to take up regtech solutions, the method by which this should be done is not always clear. According to a recent whitepaper, however, four key pillars will be involved in the construction of compliance solutions for the new era.

That compliance leaders are rapidly turning to technology for help navigating the regulatory maze is indisputable; recent research from Thompson Reuters showed 49 per cent of respondents are considering ‘regtech’ solutions to manage compliance, up from 19 per cent just two years ago.

The reasons for that, according to financial services provider MIntegrity, are clear.

“Through regtech, compliance officers are finding ways to track and monitor compliance activities across the firm in near real time, eliminate tedious manual tasks through automation and/or outsourcing, and feel confident that their compliance data is consistent, reliable, and secure,” MIntegrity explained in its recent The Future of Compliance in Capital Markets whitepaper.

While technology’s role in compliance is becoming more prominent, advisers and brokers are still looking for clarity on what vehicles will carry that technology. The first of four that MIntegrity identifed is artificial intelligence (AI) and machine learning.

“The analytical power to analyse massive amounts of data close to real time will significantly improve efficiency,” the provider noted, adding that the “frenzy” around large language models such as ChatGPT shows how quickly artificial intelligence is progressing.

Advisers and brokers will also take a more integrated, “end-to-end” approach to platforms that will see them work with one provider who can cover all of their compliance requirements. “A modular approach and a level of customisation will help support these comprehensive solutions,” the whitepaper states.

The third vehicle for change identified by MIntegrity is blockchain technology, which will enable more secure and tamper-proof record of transactions.

“It is likely to remain a niche use case but an important one,” MIntegrity stated. “An example is the CBDC (Central Bank Digital Currency) trialled by the RBA, which could have an impact on assets trading.”

The final factor in technology-fuelled compliance revolution will stem from the inexorable march towards cloud computing.

“This is not a new trend and is often complemented by edge computing. However, we expect cloud based solutions to become ubiquitous so users can access services on-demand, reducing the need for infrastructure. This supports the move to SaaS compliance management solutions.”