Regulatory scrutiny is constantly on the rise, and as it does, the regulatory landscape is becoming increasingly fragmented. This presents a huge challenge for even the largest financial institutions and is potentially hugely damaging for many smaller fintechs.
Sarah Sinclair, CEO of regulatory consultancy Change Gap, sat down with journalist Tom Bleach, to discuss the challenges fintech companies face when trying to stay compliant within this fragmented regulatory landscape, and how the firm is looking to make a positive difference in the space.
Sinclair explains that, since the 2008 financial crisis, there has been a 700 per cent increase in regulation. “It’s not just the amount of regulation – it’s the complexity,” she explains. “I’ve had lawyers tell me that their clients are asking about the connection between economic crime, ESG, and data privacy – they can’t answer it because it’s happening so quickly.”
To address these challenges, Change Gap launched ‘Co-Labs’, a global collaborative ecosystem
bringing together risk, regulatory and compliance experts and practitioners, to deliver better outcomes for all. By collaborating instead of competing, industry stakeholders can share resources, knowledge, and solutions to tackle complex problems more quickly and effectively.
“We were actually inspired by an initiative at the Bank of England and the FCA called ‘TDC’, which is all about data and reporting – just one slice of regulation. We looked at how it was bringing the ecosystem together and wondered, if that works for regulatory reporting, what about all the other areas of risk and regulation?”
The importance of value and trust
“People are overwhelmed by all this regulation, as well as operational challenges, reduced budgets and teams. Compliance is really struggling – so much so that people are leaving the industry. You need consultancies and vendors, but you also need something different. Value and trust are missing,” Sinclair added.
“If you come across as authentic, are doing things for a good reason and offer genuine value then I think that’s a difference.”
To hear more insight into the industry, as well as the work Change Gap is doing to address regulatory challenges, watch the full video interview below:
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