The Rise of RegTek Solutions
A recent Google search on the term “RegTech”, which is short for Regulatory Technology, returned no less than 260,000 results and the news section is filled with more than 13,000 articles. RegTek
Clearly the capital markets industry, consulting firms, conference organizers, and angel, venture capital and private equity investors have identified RegTech as the ‘Next Big Thing’. Having attended many RegTech-themed conferences, it is clear that many firms are in a rush to rebrand themselves as RegTech firms if their solution involves, for example, one or more of the following technologies: big data, artificial intelligence and blockchain. Many have implemented impressive regulatory-specific applications that range from helping firms identify suspicious behavior, develop better regulatory training and of course book transactions using blockchain technology.
The approach that Risk Focus took was orthogonal to the one that technology-centric companies have taken.
In 2014, clients of Risk Focus’ consulting services business started asking for a Data Quality Surveillance (DQS) platform that would allow them to ensure that derivatives transaction reporting messages being sent to a Trade Repository (TR) were accurate and correct across asset classes and jurisdictions. This is RegTech from the ground up. The rules engine and software subscription model that we developed and named Validate.Trade gained industry-wide adoption because of the regulatory SLA that we stand behind, guaranteeing that our validation rules will keep clients ahead of regulatory and TR changes.
In short order, we developed Reportable.Trade as a reporting completeness control in collaboration with a global swaps dealer, and Load.Trade as a controlled TR Reporting platform that is integrated with Validate.Trade. Thus we have built a suite of software modules under the Report-it.Trade umbrella that uniquely combine to provide a comprehensive control and compliance framework for global regulatory trade transaction reporting. Our user community of swaps dealers and investment firms benefit from a common rule base and from the ability to suggest value-added rules.
In November 2016, when the International Institute of Finance (IIF) invited Risk Focus to feature in their Innovation Hub, we were the only RegTech firm for whom a Regulatory SLA was the heart of the solution – our technology, although well designed, reliably built, and widely adopted, was beside the point. Our differentiator is the rules specific to regulations, across global jurisdictions, for a very specific problem of derivatives trade and transaction reporting.
In 2017, now that our software has reached maturity and critical mass, we have taken the leap and decided to give our Report-it.Trade software suite into its own legal entity, named, of course, RegTek Solutions.