RegTech can reduce wealth management compliance costs
An article posted in Private Banker International today highlights the opportunity for wealth management firms to lower their overal costs of compliance by partnering with RegTech companies.
A survey by GlobalData showed that while wealth managers in Asia Pacific are fully onboard, with 72% ready to partner with RegTechs to cut costs, firms in Europe (39%) and the US (19%) are less enthusiastic.
The reality, as reported in a recent Finextra article, is that compliance is still a largely manual process, with only 2% of firms stating that they have a fully automated compliance support program. Manual processes do not only cost more, they present higher compliance risks because of the lack of integration and the higher potential for human error. In addition, manual processes are slower and therefore also have a commercial impact as clients become increasingly frustrated by the lengthy and burdensome administrative processes they are being put through.
Several RegTech companies tackle part of the compliance work for wealth managers, such as AML-KYC, with companies such as Know Your Customer, a regional finalist in UBS Future of Finance Challenge 2017 or UK based ComplyAdvantage, member of the FinTech 50. The Institute of International Finance has drafted a rather exhaustive report on the matter, listing the challenges as well as the innovative solutions (including blockchain solutions) that are available: Deploying RegTech against Financial Crime.