‘Trust is the currency of the future’, said Stuart Lacey, founder of Trunomi, at the ‘Let’s talk about RegTech’ event at Rise last night. The panel discussion centred on RegTech’s place in the world, how regulators function, and meeting the challenges posed by regulation. Whilst trust in institutions was at the core of the discussion, there was an interesting point made: Is RegTech disruptive?

RegTech is inherently reactive: Regulators produce legislation. Institutions clamour to meet the challenges posed by it, and RegTech companies provide slick solutions.

The cycle repeats.

In this cycle, where’s the room for true innovation? Where’s the opportunity to disrupt? To take a proactive stance and help improve trust in financial institutions to a greater degree than regulation stipulates?

StartUps aim to disrupt – to fundamentally change the way something is done in society: to radically change how we use services and products. But how can RegTech disrupt? It’s tied to institutions, and institutions are tied to regulation. RegTech is bound up in a vicious cycle which gives the minimum required to satisfy regulators, in the most efficient way possible.

For trust to be restored in institutions, more must be done.

The panel last night concluded that we’re moving in a positive direction: regulators are increasingly focusing on outcomes and principles. This will give RegTechs the freedom to innovate according to regulatory ideas, and not institutional minimums.

Hopefully, this will incentivise institutions to adopt the best practices to satisfy regulators. To adopt RegTech solutions that do more than the minimum, that disrupt the status-quo and inspire trust.

-Dan Burke-Ward & Reece Wickens