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Regtech gets a voice

The Regtech Association, launched late last week, is a first of its kind. It’s a product of the latent demand in the finance industry for specialist technology in this area, says Eric Frost, CEO of Simple KYC, one of the association’s founding members.

“Regtech is quickly emerging due to the demand for such technology,” Frost says, during a presentation at FINSIA’s recent Institutional Markets Industry Council, following the formalisation of the Regtech Association.

In addition to Simple KYC, the association’s other founding members include regtech startups Arctic Intelligence, AML Accelerate, Complii, Cynopsis Solutions, Dynamic GRC, Dysrupt Labs, GRC Solutions, identitii, Meetig8, Red Marker, and Verifier. The association was launched at an event hosted by law firm Allens Linklaters in Sydney at the end of March.

“Against the backdrop of a digital revolution, the financial sector is investing significantly in improving technology with the aim of improving customer experience. Financial institutions, meanwhile, have significant corporate responsibilities and regulatory requirements challenging them,” Frost says in a presentation to senior industry professionals on the FINSIA industry council.

Coming of age

Regtech (regulatory technology) is a subset of fintech (financial technology); a term originally coined by the UK’s Financial Conduct Authority a little over a year ago.

While regtech accounts only for a small proportion of all money raised to fund fintech initiatives globally, regtech in Australia is growing faster than the broader fintech category, KPMG highlights in this recent InFinance article.

Simple KYC is a classic regtech startup, providing software to financial institutions and other commercial entities so they can sign up and onboard commercial customers ranging from small businesses to global businesses faster and with an improved customer experience while complying with the Anti­Money Laundering and Counter­Terrorism Financing Act, Frost describes.

Simple KYC launched a product in the market a month ago and is backed by credit data analytics company, Dun &
Bradstreet, which is Simple KYC’s minority investor and strategic partner.

Advancing quickly

Among the founding startup firms, Red Marker is another player quickly advancing in the space, after recently being
acquired by global professional education player, Kaplan, and counting at least two of the big four banks as clients.
Frost says Simple KYC is also currently working with ANZ as well as a global card issuer and is speaking to other large institutions about designing compliant customised onboarding systems.

“Financial institutions have important regulation to meet and corporate responsibility to ensure that they know who their customers are and to ensure they are not on a blacklist of possible terrorist suspects, money launders or other financial crime committers,” he comments.

Like other regtech startups, Simple KYC aims to help companies meet regulations, automating much of this process as well as improving the experience of the end customers. The Australian Securities and Investments Commission has been the local regulator on the front foot, setting the tone at the start of the year, hosting roundtable discussions in Sydney and Melbourne with startups and service providers.

Still, other regulators are showing an interest in interacting with startups, Frost comments.

Among the regulators and representatives of government agencies in attendance at the ASIC roundtables were
representatives from the Australian Prudential Regulatory Authority, the Reserve Bank of Australia, Austrac and the Treasury Department.

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