How Chief Compliance Officers Can Unlock the Promise of Regtech Solutions
For chief compliance officers grappling with ever-growing regulatory demands, regtech technology offers a tantalising solution. Automation, advanced analytics and artificial intelligence promise to streamline manual compliance tasks, reduce errors and improve risk detection. Yet many compliance leaders remain cautious about embracing new regulatory technology.
John Spencer, chief compliance officer at a mid-sized asset manager, recalls early scepticism from his board. “They saw regtech as another IT fad with high costs and unclear benefits,” he says. “But after implementing a KYC onboarding solution, we cut processing time by 50% and false positives by nearly 40%. It transformed how we work.”
Spencer’s experience echoes a broader trend in the financial industry. According to the Hong Kong Monetary Authority’s Deputy CEO Arthur Yuen, “A range of stakeholders from across financial institutions need to buy in to Regtech and collaborate fully in adopting it.” This collective buy-in is key to realising regtech’s full potential in compliance management.
Here are six practical steps for compliance officers aiming to make regtech work effectively in their organisations.
1. Identify Your Most Pressing Compliance Challenges
Michael Gioffre, former chief compliance and ethics officer at Voya Financial, stresses the importance of understanding how money flows through the organisation and where compliance risks lie. “You have to really understand the mechanics of the organization, who is doing what, and what new products are coming aboard,” he says.
Conduct a detailed review of compliance processes to pinpoint bottlenecks, whether it’s slow KYC onboarding, burdensome transaction monitoring, or error-prone regulatory reporting. Quantify the time, costs and risks involved. This diagnostic phase lays the foundation for a focused regtech strategy.
2. Build a Financial Case That Speaks to the Board
Regtech budgets compete with many priorities. To secure funding, frame investments in terms of tangible financial benefits.
Steven Weiss, general counsel and chief compliance officer at The Roosevelt Investment Group, highlights how automation supports fiduciary responsibility. “We have to get people to understand that we’re in business to maximize profit for shareholders, but we have to do that from the perspective of the fiduciary.”
Demonstrate cost savings from reduced manual work, fewer compliance errors and lower regulatory fines. Show how faster onboarding or reporting accelerates business growth. A clear return on investment narrative makes regtech a strategic, not discretionary, investment.
3. Engage Stakeholders Across the Organisation
Successful regtech adoption requires collaboration across compliance, IT, risk, operations and sometimes sales. Form a steering committee with representatives from each function.
“Data and Regtech go hand-in-hand,” notes Arthur Yuen. “Data must be at the heart of any Regtech conversation.” Involve IT early to address integration and security. Engage business units to ensure solutions meet operational needs. This cross-functional approach reduces resistance and smooths implementation.
4. Run Targeted Pilot Projects for Regtech Implementation
Brian Tang, managing director of the FinTech Association of Hong Kong, calls regtech “the secret sauce” for competitive advantage. But it’s wise to test regtech solutions before full rollout.
Select a pilot with clear objectives, for example, KYC onboarding for a specific client segment or transaction monitoring on one product line. Define success metrics like processing speed, error rates and user satisfaction. Use pilot insights to fine-tune the solution, train staff and address technical challenges.
5. Plan for Seamless Regtech Integration
Regtech tools must connect with existing customer databases, transaction systems and risk platforms. Work closely with IT to map data flows, define APIs and ensure compliance with security standards.
Subas Roy, partner at Oliver Wyman, emphasises the need for modular, open-architecture solutions to avoid vendor lock-in. “Banks are beginning to appoint heads of RegTech to advise senior leadership on strategy and bring different regulatory compliance programs together on the same digital platform,” he says.
Document integration end to end to maintain auditability and simplify future upgrades.
6. Embed Continuous Monitoring and Feedback Loops in Regtech
Compliance requirements evolve constantly. David Bailey, chief risk officer at the Bank of England, stresses that “data and RegTech go hand-in-hand.”
Implement real-time dashboards to monitor key indicators like alert response times, false-positive rates and system uptime. Review results regularly with stakeholders and adjust rules or AI models based on user feedback and regulatory changes. This iterative approach keeps regtech aligned with organisational needs.
Final Thoughts
For chief compliance officers, regtech is not a quick fix but a long-term journey. It demands disciplined planning, strong cross-team collaboration and ongoing governance.
By diagnosing compliance pain points, making a clear financial case, engaging stakeholders, piloting solutions, planning integration carefully and embedding continuous monitoring, compliance leaders can transform regtech from hype into a sustainable competitive advantage.
As John Spencer reflects, “Getting the board and the wider organisation onside is just as important as the technology itself. Regtech works best when it’s part of a broader compliance culture and strategy.”
