Conservative government speaks to FinanceFeeds on importance of regulatory technology in FX
London leads the way in financial technology, however its regulatory authorities are committed to stimulating innovation. We talk to the central government about how FinTech and electronic trading are priorities for London as a financial powerhouse
Facing uncertain times, financial services and electronic trading companies preparing for significant regulatory reforms this year are focusing on regulatory technology to help them respond quickly to the opportunities offered by change, according to Thomson Reuters annual report on the State of Regulatory Reform.
The potential dismantling of existing rulebooks in the UK and US is a risk but also an opportunity, something which has been looked at in detail by various analysts and institutional reporting companies, Thomson Reuters to name just one.
London continues to lead the technological development and continual modernization of Britain’s financial markets, with the Financial Conduct Authority (FCA) having been one of the first national financial markets regulatory authorities to create a development ground – known as a ‘sandbox’ – its necessity being paramount as London is the world’s leader in financial technology, from infrastructure to proprietary trading platform development.
So far, within large institutions, a vast amount of attention has been given to distributed ledger technology, also known as blockchain, which promises to reduce banks’ costs in several areas, including KYC.
Regulators in regions with signifiant and dominant financial markets industries are keen to see more technology adoption in compliance, with automation, machine learning and artificial intelligence (AI) advances likely to cut through cumbersome and paper-intensive reporting processes, a matter that FinanceFeeds has researched in detail recently.
Colloquially known as “regtech,” a growing number of solutions have emerged, and look set to reduce costs, compliance headcount and reporting time.
To gain a perspective on this from a governmental point of view, FinanceFeeds spoke today to Adam Afriye, Conservative MP for Windsor, who was a member of the Science and Technology select committee from 2005 until its abolition in July 2007, has been the President of the Conservative Technology Forum and Chair of the Parliamentary Office of Science and Technology since 2010.
Mr. Afriyie is Chairman of Connect Support Services, an IT support company he set up in 1993. He owned two-thirds of DeHavilland, a political monitoring company, which was sold to publishers Emap in 2005 for £18 million. He was also a regional finalist in the 2003 Ernst and Young Entrepreneur of the year awards. He was a Governor of the Museum of London, a trustee of the Museum in Docklands and a director of Policy Exchange, a centre-right policy body.
Additionally, Mr Afriyie is a stakeholder of Axonn Media, a content marketing business which produces content for clients. The company incorporates brands such as Content Plus, NewsReach, DirectNews and ReelContent. Axonn turned over £9.4m in 2011 and made a pre-tax profit of £1.3m.
He is also the largest shareholder of the firm and he and his fellow directors split dividends of £2.2m in 2010 and 2011 and shared directors’ pay of £3.6m over the last five years.
This morning here in London, Mr Afriyie explained to FinanceFeeds ““London’s status as the global centre for Financial Technology did not come about by accident but rather due to the positive and supportive actions of British legislators, regulators and financial firms.”
“That’s why as the Chair of the All Party Parliamentary Group on Financial Technology I was so pleased to hear the FCA explicitly highlight RegTech throughout the whole of last year as a sector where they are committed to playing an active role in fostering innovation” – Adam Afriyie, Conservative MP
“More can be done to stimulate advances in the RegTech sector. The FCA’s Call for Input from July last year highlighted the pro-active, but limited, role that they can support the sector, in particular aiding the industry in defining standards and guidance. However, the FCA are also receptive to the role that Government cannot play, such as building one-size fits all regulatory solutions to an area with a great diversity in complex legacy infrastructure.”
“It is reassuring that we have a Government that recognises technology is the key to our continued economic vibrancy and that seeks to nurture and adapt to disruptive new technologies through the Industrial Strategy rather than try and stifle them” he concluded.
In Britain, it is certainly not only the financial sector that leads the technological drive into the future, but also the official regulators, backed by astute members of central government.