Our work with the financial service industry over the years has taught us that they buy a certain way whether it be tables and chairs, or the latest technology they are buying.
There is plenty of talk about banks and start-ups needing to work together; the reality is that this is a very long road for all involved, with extremely long sales cycles and even longer implementation projects.
Technologies like public cloud tend to scare even the most open-minded of procurement managers. Requirements surrounding security, data privacy, availability, resilience, redundancy and so on are often hard to meet when using public infrastructure that was not so well developed when these requirements were formulated.
What is, perhaps more important, however, in our experience, is that firms want complete solutions to their challenges. There are many really advanced RegTech solutions to particular individual problems, which must be integrated into a workflow or overall solution to unleash the full value.
There is an expectation and belief on the part of the industry that there will be some “useful consolidation” of related RegTech solutions in the coming years. That could take the form of larger consulting firms, or technology firms buying up the smaller RegTech solution providers, or perhaps groups of firms merging to create mega-RegTech houses. Even if the human factors surrounding such mergers and acquisitions can be overcome, it would be years before such value can be created. At the same time, there is a very real need for RegTech, right now. This set us on a course to an alternative approach that could provide the whole services firms need in a format that they can use today.