The rise of reg tech

By Sarah Gill | 31 May 2016

As the threat of cyber attacks soars, the ability to verify who customers say they are has never been more vital. Winner in the category of ‘Innovation in cyber security and anti-fraud’ category at the Fintech Innovation Awards this year, Trulioo’s GlobalGateway product aims to help organisations instantly verify consumers around the globe. Here, Trulioo president Jon Jones talks about changes shaping the sector, what makes a great team and the rise of ‘reg tech’.

What are the key drivers of change in your sector right now?

The breadth of data available for organisations to leverage for identity verification is made possible by mobile technology. There are over 5bn mobile phone users in the world today who have created a digital footprint through these devices. Information about each mobile user is being captured electronically and this information can be used by third parties to verify the user’s identity so that they can access products and services they want. Data is meaningless unless it is organised in a way that enables people to understand it, analyse it, manage it, and enable access by third parties.

Everyone is talking about reg tech at the moment – why now?

Fintech has taken off largely due to these companies seeing opportunities that incumbents haven’t seen or can’t address. With huge consumer demand for fintech products, reg tech offers a level playing field for all players, including traditional banks, challenger banks and new fintech entrants.

Not only does regtech seek to address the multiplying compliance obligations in a cost efficient manner, but it is nurtured and supported by governments. The UK is a great example of where this is happening.  The Financial Conduct Authority (FCA) provided clarifications on the steps regtech companies must take to comply with UK regulations and have collaborated with firms through partnerships with financial institutions, accelerators and academics.

What are the challenges of innovating in this space?

The constantly-evolving global regulatory landscape makes it challenging to innovate because there are 7bn people in this world who can benefit from access to fintech services, however, there are hundreds of legislations, jurisdictions and regulators across the globe that make it difficult for companies to navigate. Innovation is never free from risk, but there are ways to mitigate with reasonable and appropriate policies and procedures.

The lack of harmonisation of in-country data privacy hinders development of a global compliance program, especially for companies transacting and expanding across borders. Secure access to data combined with cutting-edge technology helps facilitate innovation for fintech products and services.

Ideas versus execution: what does it take to make great ideas a reality in fintech?

The key to success for fintech companies is to focus on the end user experience, create operational efficiency and plan for scale from day one – all whilst ensuring the customer feels secure. Traditional banks and financial services are suffering customer churn because they can’t innovate fast enough due to their reliance on legacy infrastructure  and in not providing customers with products that meet their individual needs. With the abundance and breadth of data and advanced technology available, fintechs have an opportunity to create efficiencies in the workflow, such as automating systems, eliminating manual processes, and reducing redundancies. Last, but not least, fintechs should always execute with the notion of “Go Big or Go Home” which includes how international growth can be achieved - don’t build a local product that will need to be re-engineered every time you enter a new market.

Fintech companies inherently operate in a business environment where security, compliance, and data privacy are paramount. Having product/market fit is essential, but only the first step. One of the more exciting parts of building Trulioo’s business is that we concurrently act as an enabler for all Fintech innovation. Helping to solve the increasingly complex questions around cyber security, cross-border regulatory standards, and changing privacy legislation is a huge win for Fintech companies wanting to make their ideas a reality and scale their operations globally.

What are the qualities of a kickass team in your eyes?

Each member of our incredible team is inspiring, resilient and possesses grit for themselves and their team. At the office, I get to witness compassion, dedication and accountability in everything that they do and I’m honored to be leading such an extraordinary team.

What’s the most important lesson you learned building Trulioo?

Building an innovative product in today’s dynamic business world and constantly-evolving regulatory landscape, requires an agile approach to everything. From software development and customer support to sales and marketing and strategic partnerships, your team should always be flexible and adaptable to changes in the market. 

What distinguishes Trulioo from its competitors?

Our product, GlobalGateway, offers our clients complete transparency in what contributes to an identity being verified – our product was built from the ground up to address KYC and AML compliance and this transparency is critical. Unlike our competitors who offer a black box response, , GlobalGateway is able to display each identity attribute that was matched/not matched by each data source, therefore allowing clients to set very custom rules logic by local jurisdiction.

Additionally, we currently have the ability to instantly verify over 4 billion people in over 50 countries through a single API integration, alleviating clients from having to procure, manage and negotiate multiple contracts for each data vendor, conducting due diligence for each data provider to ensure the strictest security standards have been met, and hiring a technical team to manage development of APIs that seamlessly integrate into their systems.  

We help our clients save time, reduce operational costs, yield massive efficiencies, and enter new markets faster than ever before, giving them a competitive edge that powers their international success.

Where are the most compelling applications of your technology that you have seen in finance?

Providing global payment companies with instant identity verification capabilities in emerging markets is one of the most compelling applications of our technology. Our technology helps payment companies meet anti-money laundering and know your customer requirements in over 50 countries at a low cost with minimal customer friction. 

Missed out on the FIAs 2016? Get a flavour of what the biggest names in finance are predicting about the industry with our interviews from the night on the most exciting trends in fintech, the biggest challenges facing the industry and where the most lucrative opportunities for disruption are.

To secure your table at next year’s awards or discuss partnership opportunities, get in touch with Stephen McMaugh at Stephen@bobsguide.com or call +44 (0)208 080 9164.

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