This year, AIMA hosted their Global Policy and Regulatory Forum in Dublin.
As key sponsors, Arkk Solutions moderated the RegTech panel, and spoke to over 400 industry leaders in the investment industry.
From Brexit to bitcoin, the conference was a packed day of new intel and insightful opinions. Here, we distil the key trends of the day, and what this means for investment managers in 2018.
If there were any doubts that Brexit would be a hot topic at the forum, this vanished after Friday’s announcement of the 21-month transition period between May 2019 and December 2020. This tied in perfectly to the forum’s theme of ‘Managing a Fragmented World’.
Panels throughout the day expressed a mixed perception of preparation for Brexit. Whilst some regulators commented that they’d seen managers outlining their strategy, others expressed concerns that there was not enough activity in the industry to prepare for the shift. One thing panelists did agree on was that Brexit is undoubtedly set to be a complex challenge, and that the task ahead is too important to leave until the last minute.
Linking back to the former Economic Secretary to the Treasury’s comments in 2017 that there would not be a “heavy deregulatory agenda” post Brexit, discussions focused around the challenges that might arise if the UK applies for third-country status. There was also debate about whether this process would even follow the same model as existing third-countries. It seems that individual national competent authorities may need have their own agreements with the UK, and that it’s unclear in the current climate what this will look like.
Despite uncertainty, the message of the day was to “start preparing now”, rather than wait for the final guidelines.
Arkk Solutions partnered with AIMA prior to the event to survey delegates about the impact of technology on regulatory reporting, and what challenges are most impacting manag
ers today. Running a live poll on the day confirmed our pre-forum findings. 60% of delegates reported that greater global consistency in requirements would improve regulatory reporting.
This sentiment was reflected by regulators who feel that stability and continuity would help advisory firms servicing UK clients. Reporting should be sufficient enough to create a global, fair, standard, and to show responsibility from managers to their investors.
The drive for data insights
89% of delegates on the day reported that they use technology to manage costs and respond to reporting requirements, compared to just 11% suggesting they use tech to improve their own performance. It’s clear that firms and regulators alike want to understand their data better, and how this is being used to beyond compliance.
Arkk’s CEO and Founder, Richard Metcalfe, kicked off his panel commenting that “punching data into Excel is about to have its day.” We found a lot of delegates were reflecting on the original thoughts around regulatory reporting in 2008, where the requirements placed on banks felt like an impossible burden. Ten years later, and investment firms of all sizes have adapted, giving managers confidence that they can will adapt again to accommodate future changes.
The subject of potential ‘live’ regulatory reporting arose, will the majority of delegates voting this as the top question to ask. In Spain and Norway, VAT reporting models are available daily, and HMRC’s upcoming Making Tax Digital proposal looks to create a culture whereby HMRC can review returns at all times, rather than via annual reports.
There was resounding agreement between panellists that if this trend does take place in the investment sector, then regulators too need to respond in real time. The benefits would need to go beyond compliance, and ensure that all firms have the information they need to react to a fast-moving market.
Tune in for more on AIMA survey trends and insights
We’ll be sharing results and commentary on our survey next week, and will tackle some of the big questions from the day to uncover what’s top of the agenda for managers in 2018. Check back on our blog for details over the next two weeks, or contact us if you’d like to receive the link via email.