Recapping “Venture Investments and the Future of RegTech” Panel from RegTech 2018

Clearsight attended this week’s RegTech 2018 conference hosted by American Banker and we paid special attention to the “Venture Investments and the Future of RegTech” panel.

Below, we share several key takeaways from the panel:

There are conflicting points of view on which technology is more valuable – horizontal tech that spans multiple industry segments versus narrower, vertically-oriented point solutions. Regardless of panelists’ opinions, all agreed on the importance of selling solutions as opposed to selling technology platforms.

AML continues to be a RegTech darling as all panelists indicated they anticipate an influx of AML/KYC technologies and solutions during this investment cycle. As a brief aside, we contributed to Contexture’s recent whitepaper on best practices in policy and compliance that touches on how financial institutions are relying more on natural language processing and artificial intelligence for AML and KYC requirements.

From an investment perspective, panelists agreed that legacy and core technology platforms are less impactful today than they once were, given their demonstrated inability to lead the charge in innovation. Startups targeting the financial services space, however, are building solutions with a keen eye on how to best integrate legacy systems into their products – further proof that core tech is not going away anytime soon.

An intelligence analyst with CBInsights mentioned that data privacy remains a core investment theme that transcends all industry segments. Clearsight closely follows the data privacy sector and reiterates that data protection-focused consulting and tech firms stand to benefit greatly as businesses reckon with mitigating regulatory and reputational risks.

Finally, when addressing a question regarding “RegTech Nirvana,” a partner at FTV Capital defined it as the juxtaposition between tools that are purpose-built for automation, intelligence or data, and SMEs who deduce high-quality insights from those tools to make informed business decisions. Put simply, the intersection of technology, data, and well-informed SMEs (internal or external) is the key to unlocking the ideal risk management state.