There is an almost unlimited opportunity for the RegTech sector in Australia, but the country must move quickly at every level from RegTech startups to the regulatory environment to government participation or it risks being left behind
So said a gold plated list of panellists at the InnovationAus.com’ RegTech Australia 2017 event in Sydney this week.
The panel was moderated by tech journalism veteran Beverley Head and looked at how far technologies like blockchain, machine learning and data analytics could take the regulated sector.
The panellists were Deborah Ralston, Chair of ASIC’s Digital Finance Advisory Committee and a member of the RBA’s Payments System Board, Bruce Wren, CEO of Wordflow, Matt Symons co-founder of Red Marker, Julia Walker, Head of Market Development, Risk, Asia, Thomson Reuters and Harry Toukalas, Group Managing Partner, Blackhall & Pearl.
Ms Walker described the massive volume of regulation hitting the market and the opportunity for RegTechs.
“Since the GFC there’s just been rafts and rafts of regulation coming through. Our regulatory intelligence service picks up about 50,000 regulatory changes a year – that’s an average of about 201 a day. Trying to manage that is obviously hard.”
This deluge of regulation could be a RegTech bonanza but are there limits to what RegTech can do?
Not really, says Ms Ralston. “We are just scratching the surface as to what can be done. I think the environment in Australia has changed absolutely phenomenally over the last couple of years.”
“One of the really important criteria has been political will. When ASIC first asked me to take on this role I wanted to know who was the champion at the federal government level. Without being political, Tony Abbott was prime minister and there was no obvious champion of innovation.
“That environment has changed and we are just starting to see the benefits of that coming through with open data.”
“Are there any limits? I don’t think at this stage that there are. There are things we have to keep in place in terms of consumer protection and if there is any push back I’ts from the consumer lobby more so than anything else.
“A fundamental building block we haven’t got yet is digital identity – that’s really critical.”
Ms Ralston sees two major boom areas for RegTech, real time surveillance of capital levels and financial results and compliance automation.
“On the retail side I love the idea of getting rid of these poor fellows in the compliance department so the people doing these jobs are acting in best practice as they do their job so it’s a learning environment and it’s a much better culture of consumer protection.”
Ms Ralston sees a very long future ahead for the local RegTech sector. “I’m probably going to be watching the real outcomes of all this from the nursing home,” she says.
So in order to take advantage of a limtless opportunity, what do RegTechs need from government, regulators and industry to really get going?
“We want government to think about big information and not so much big data so we really have this information highly organised so we can apply the new stuff to contextualise it,” said Mr Wren from Wordflow.
“Let’s talk about what we want to create,” says Mr Symons. “What do we imagine this could look like. There’s been a lot of talk about royal commissions and firing senior bank executives.”
“We must be almost at the point in the cycle where we don’t just talk about how bad it is but what all of us want it to look like,” said Mr Symons.
Ms Walker would like to see robust collaboration between players to develop the local RegTech scene.
“There’s people in this room who have taken a lot of our data and built companies off the back of it. That’s where we need to be a bit smarter and more collaborative,” Ms Walker said.
“There’s room for everyone in this and sometimes you don’t have to re-invent the wheel. You can take something that’s already there, build on it and have your own company on the back of it,”
Australia really needs to make a move on the RegTech arena, says Ms Walker because our Asian neighbours are already powering up their RegTech plays.
“There’s a huge amount happening across the globe and a huge amount happening across Asia. There’s a real fight between Singapore and Hong Kong. Japan’s been a bit quiet but they are coming up really fast with a great blockchain ecosystem
There’s a big opportunity for Australia to collaborate and put its foot on the stage or else we will be left behind,” she said.