In case you missed it, the full transcript for our webinar a few weeks back on compliance in the wonderful world of fintech is now available.
A huge thank you to our panellists, Ramy AlDamati of AlBrza in Abu Dhabi, UAE, and Mona Zoet of RegPac Revolution in Singapore, for sharing their insights and experiences with us on the growing fintech industry and how it has been tackling its ever-increasing regulatory obligations.
Feel free to check out the transcript below and get in touch if you have any follow-up questions for our experts.
For now, here are some of the event’s main highlights!
What are some of the best practices for fintech companies when it comes to compliance?
Mona Zoet: “One of the things that we have seen quite a bit with fintech companies is that they, especially in Asia, try to come up with a product that is really cool based on a technology without really knowing whether that is really market fit for the company that it actually wants to partner up with. Sometimes there is a mismatch in the products that are out there… For instance, it does not gel well with the systems that are already there, it might be that there is no data or they have not used any data…”
“There are also challenges [with] implementation and stuff like that… Fintech companies sometimes forget, because if you build a product, you want to, of course, sell… Nine out of ten times, you try to oversell it, or you oversell it and you cannot deliver, or you oversell it and it takes a while before it actually can be implemented, or you have not asked the right questions, or you did not have the right people at the right table. So there are, from an implementation perspective, some areas that are sometimes a mismatch.”
“Third… if you really want to be successful, you need to make sure that your technology and… the right professionals are in the right place. Although the technology is super important, the people are super important too. Very often you see tech companies that actually only have very great talent in technology, but you really do not know what [they have] from the business side or… [in terms of] the other persons that are also super important to provide the right kind of information to make the product really market fit as well.”
How important is it to establish solid relationships with regulatory authorities in your pertinent jurisdictions?
Ramy AlDamati: “In Dubai, the government is supporting these kinds of initiatives and their engagement and they are regulating this, which is the country’s strategy to be more logical, transparent, well-coordinated through practices, processes, toolkits, all of these things, and this really will help the relations between the [relevant parties]. If I want to engage with them, I know what I need to do, what I have as a regulatory body. Also, it is good to set up frequent meetings, not only meetings with the regulator, but in multiple areas, maybe organising multiple engagements, multiple conferences, or sessions to help with brainstorming. This will help [with] icebreaking between the regulatory agency and the start-up, maybe with the banks or other [organisations].”
“Also, it is a good [idea] to centralise the documents that can be shared between them, so if one entity shares or creates research or authors an article or something, they need to be on a platform that is available, that everyone has access to, so everyone can understand each party, how it is working, what are the ideas in the market, how things can be done correctly.”
What do you foresee for compliance in the fintech world as we move into the second half of the 21st century?
Mona Zoet: “I think we are more or less midway… For me there are two issues. One is within the financial services industry: Where do we see us more or less ending up and how far are we? I would say we are already getting there in certain areas such as KYC and AML. There are certain areas that everybody is jumping on like, okay, we need to have a different kind of solution, less manual processes, etc., and there are solutions out there that are already quite good. What we would like to see is…more forward thinking, so that you can not only meet the requirements but, in principle, also make predictions on certain data that is out there, so that you can prevent risks from happening instead of just only mitigating those risks. That is, I guess from that perspective, a utopia where we are not totally there yet.”
“From my perspective, the digitalization and digital transformation within the regulatory space is at a relatively early stage. Maybe in the financial services world, it has been talked about quite a bit and we have some use cases already and it is going in the right direction. But, if you look at, for instance, other regulated areas and even unregulated areas such as healthcare, the pharmaceutical industry, they have a lot of administrative manual processes as well [and] from a tech perspective, it will help tremendously with the customer experience too. I think that is important to acknowledge. It is not only the financial services world that needs to transform… It is a public-private kind of transformation that needs to happen within the regulatory space as well, and that is more the focus that we must try to handle going forward. But, of course, companies need to also see that that could be an added value and there is a lot of education that still needs to happen from that perspective.”
Ramy AlDamati: “I believe we need to rely a lot on the data itself, so moving from KYC to KYD analytics of the user itself. Like Alibaba payment or in China, they are doing full analytics on user behaviour in whatever areas, and they give them loans within a few minutes or something like this. The data is the important part to focus on, how to analyse it, and how to save it. Cybersecurity is a major part in this area because if you comply, if you have good software, but you have a weak database or weak platform infrastructure, you will definitely be under hack, meaning compliance fines and all these things. Also, start-ups these days do not need to build infrastructure, they can get the infrastructure as a service or anything as a service, but they need to select it correctly in order to comply and move fast into the market and solve the most important issues with their idea.”