SwissBanking
The online magazine of the Swiss Bankers Association
April 10, 2018

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RegTech: an enabler for established banks

RegTech: an enabler for established banks

What are the advantages of RegTech and how can the work done in the legal and compliance departments of banks be simplified with the help of digital tools?

For insight, Andreas Barfuss, Head of Financial Market Law at the Swiss Bankers Association (SBA), spoke with Ralf Huber, President of the Swiss chapter of the International RegTech Association and Co-Founder of Apiax, as well as David Bundi, Chief Compliance Officer of Hypothekarbank Lenzburg and leading RegTech expert.

insight: Mr. Huber, can you explain RegTech in one sentence?

Ralf Huber: Good RegTech solutions help banks to systematically and inexpensively master regulatory challenges with the use of technical Tools. 

Mr. Bundi, do you agree with this, and do you have anything to add?

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David Bundi, Chief Compliance Officer, Hypothekarbank Lenzburg
David Bundi: Regulation is without a doubt the point of departure. From a horizontal perspective, RegTech is very broad in scope, because it impacts all sectors of industry and creates holistic opportunities. That is why economiesuisse, has, for example, created a working group dedicated to RegTech. The experiences gained with RegTech in the banking sector are helpful for the overall economy, and knowledge-oriented collaboration is the key for shared success. From a vertical perspective, you can differentiate between RegTech for companies, in other words in-house compliance, and RegTech for government bodies such as supervisory and regulatory authorities.

 

  

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Ralf Huber, President, International RegTech Association Switzerland
Neither of you has mentioned the catchword automation. Is that intentional?

Ralf Huber: Absolutely. It’s not about having a robot carry out legal tasks. I doubt that will even be possible in the near future.

Where do you see the biggest benefits of RegTech?

Ralf Huber: In increasing efficiency. If a bank succeeds in digitalising and properly managing regulatory requirements, the in-house experts no longer have to deal with reoccurring issues but can focus on the complex cases that really require their attention.

 

 

What is your view of this from a bank perspective, Mr. Bundi?

David Bundi: In addition to efficiency gains, RegTech provides an opportunity for more data-based, integrated and comprehensive compliance, which increases a company’s quality of work and transparency. But the best step is still to come, namely that information based on data analyses can create added value from risk functions and for the business. Think of a single data highway for each bank with target audience-specific data utilisation, for example in the areas of KYC/AML or conduct risk.

Mr. Huber, how do you envisage the future role of lawyers in the financial sector?

Ralf Huber: The legal workplace will become more digital. The interpretation of laws and other regulations will in future have to be provided in a language that today’s users understand: not just digitally in the form of a PDF document, but as a machine-readable rule. In this context, I like to talk about “regulatory engineers”. And this will also be reflected in students’ educations. Having said that, not everything will change. Legal expertise, which will continue to be the basis of every “machine-readable” rule, will, for example, always remain important.

Mr. Bundi, to what extent will the job profile for the role of a compliance officer change in future?

David Bundi: For financial services providers who are in step with the times, the role of compliance officer has already changed significantly. Compliance expertise, legal know-how and practical experience in the day-to-day banking business will always remain key. In addition to an affinity for data, processes and technology, I personally expect a compliance officer to have an understanding of topics such as data visualisation, gamification, customer journeys and open banking collaborations in the context of compliance. In the age of blockchain, I actively advocate this mindset for compliance officers both inside the bank and externally at compliance and RegTech appearances in Switzerland and abroad.