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Innovation to Manage Risk & Compliance Across the APAC Region


Synopsis of Keynote Interview - RegTech Summit US

Dilip Krishna, Deloitte & Touche
Joseph Lodato, Guggenheim Partners

Dilip: What is the biggest challenge facing institutions in compliance today?

Joseph: Compliance is becoming more prolific, and a compliance officer’s mandate is broadening to cybersecurity, vendor management, operating risk, etc. The technology that’s coming in to solve these problems is also prolific, and compliance officers need to understand the technology more and more.

Dilip: How do you take RegTech and make it practical within your business?

Joseph: A lot of vendors are building compliance solutions and coming at it from different angles. As a compliance officer, the biggest implementation challenge is that most firms aren’t ready to deliver data to these analytic engines. You need to be able to clean up the data and do better data governance to make these systems practical and successful.

Dilip: Can you talk about the partnerships you’ve had to form within your organisation to implement RegTech?

Joseph: I work closely with the CIO and the business executives to get new systems implemented. Knowing what the executives’ needs are can help to use this technology to make better business decisions.

Dilip: Is RegTech a cost play, or is it more than that? Does it improve the quality of compliance?

Joseph: It’s an important cost. One player can cost a firm an enormous amount in legal fees and fines. These days, compliance officers have to look at everything… tens of thousands of emails… and you can’t do it with today’s infrastructure and technology – you need things like behavioural analytics. The time we save, and the productivity gains, will far outweigh the cost of implementing RegTech solutions, if we do it properly.

Dilip: Is RegTech just another technology project, or is there anything special you need to think about when implementing it?

Joseph: If you’re not running the project alongside the IT team every day it will go off the rails. People try to make the technology fit into the organisation, but the technology is what it is – you have to change the organisation, and change the process of the daily work. Compliance officers need to spend time with all the players in the room, and agree what the objectives are from the beginning – not after implementing a new software. Whether you use advisors or in-house expertise, don’t sell short your implementation process.

Dilip: You have a good grounding in technology. What is your advice for compliance officers who don’t have a similar background?

Joseph: Come to a lot of these conferences! You have to learn about the technology. When tech guys used to tell me how long something would take and how much it would cost, I didn’t know whether they were right. So I started to learn more about technology. Trading technologists sit on the trading floor, so they can understand the business. The tech guys who I work with are on the same floor as me. Compliance professionals need face-to-face interaction with tech guys all the time.

Dilip: The RegTech market is nascent right now, and firms have to figure out how to plug many new tools into their processes. How do you see that evolving?

Joseph: Eventually, compliance and regulatory businesses will need a platform, so that a manager can look at the dashboard for compliance next to the dashboard for sales. That means all the data needs to come together. I don’t know if this will happen, but that is my hope for the evolution of the space.