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The UK Department for International Trade (DIT) is taking 16 financial technology (fintech) companies to New York as part of a technology-focused trade mission that helps companies meet strict regulations in the finance sector.
The department is taking the UK-based small and medium-sized enterprises (SMEs) to promote their expertise in developing software to help organisations comply with regulations – dubbed “regtech”.
This is part of a DIT trade mission at New York’s Empire Startups Fintech Week. It hopes to attract global businesses to its tech firms.
As a sub-segment of the fintech industry, regtech has been more in demand since the global financial services crisis of 2008, which was caused by banks behaving recklessly and led to more regulations being introduced. Today, machine learning, big data and cloud computing are helping governments and financial institutions to transform regulatory practices.
Over the same period, fintech has grown in the finance sector, with consumers increasingly taking up technology-driven financial services, which are simple to use. Regtech does a similar thing for compliance teams, allowing advanced technologies to extract, transfer and load datasets that are cluttered and tangled to create consumable information.
The DTI is working with money transfer firm Western Union to promote UK SMEs offering regtech at its Lunch and Learn session in New York.
Mark Garnier, UK international trade minister, said: “UK firms are leading the way in finding innovative technology solutions to help businesses comply with regulation. Following hot on the heels of the UK-India FinTech conference in Mumbai and the International FinTech conference in London, my department is working with Western Union to ensure the UK is well represented at RegTech in New York and, together, we will ensure UK tech companies take advantage of the global opportunities in this growing sector.”
Some of the technologies enabling innovation in regulatory compliance
Machine learning: As the volume of data analysed for various types of compliance increases, systems that use machine learning will become indispensable for companies’ regulatory success.
Big data analytics: Regtech uses analytics tools to intelligently mine existing “big data” datasets and unlock their true potential, for example by using the same data for multiple purposes.
Cloud computing: Cloud computing offers the agility to successfully respond to changing processes. It also delivers cost-effective applications and efficient modelling of new regulatory demands, along with technology that can be upgraded easily.
Source: Sapan Agarwal, Frost & Sullivan Asia Pacific
Recent research from Western Union revealed that nearly one-third (30%) of UK SMEs and nearly one-fifth (18%) of US SMEs are concerned about the impact of changing international regulation and compliance.
Kerry Agiasotis, president at Western Union Business Solutions, said the trade mission was an opportunity for US firms to learn from the UK regtech industry.