May 16, 2023
While some aspects of the IT industry are prone to the ups and downs of the global economy, others like regulatory technology (RegTech), and the broader related aspects of governance, risk and compliance (GRC) are more insulated.
In fact, RegTech is one of the unique areas of enterprise IT that rarely requires specific budget approvals and allocations. It’s essentially a prerequisite cost of doing business, especially in the highly regulated realm of banking and finance. There, where risk and compliance is inherent and everpresent, the technology can not only help avert missteps, but build trust and drive revenue.
Compliance for Competitive Advantage
Consumers today have a range of financial service options one could barely imagine just a decade ago. The technology behind these new services also makes it easier than ever for customers to switch among them. Unhappy with your bank’s customer service? Concerned about the security of your investments? Change is as easy as a few clicks or a visit to the app store.
To compete in this fintech-fueled environment requires driving customer loyalty and trust, and to do that, means being the best possible steward of your customers’ financial resources and personal data.
This has led to a bit of role reversal in the overall banking, financial services and insurance (BFSI) tech stack, with RegTech becoming as critical to driving success as anything in the IT toolbox. While there is still tremendous focus on technology to enable superior insights and decision-making, the spotlight is increasingly on what may have previously been considered as tactical technology.
This has turned governance and compliance into rising stars on the industry stage. In fact, in a recent study, banks reported compliance remains the most-cited priority, with the largest percentage of banks identifying it as their single most important IT investment driver.
The Spotlight Grows Brighter with Cloud
All this attention has led to rapid growth in GRC, with the market forecast to hit $27B by 2027. The pace has been buoyed by accelerated migration by banks to the cloud. The same study reports 76% of banks globally planning to move more workloads to public cloud, a process which has been slow due to unique concerns over governance, oversight, data protection and security.
Recent advances in GRC have helped alleviate past roadblocks and concerns to cloud modernization. By bridging critical gaps between on-prem IT and distributed apps and infrastructure, GRC providers have played a vital role helping legacy financial providers match wits with their most agile, disruptive rivals. The impact can be seen for consumer-focused providers and global investment banks, as well.
Look for the Holistic Approach
While there are many new solutions in this space, the broad complexity and expertise required, spanning both legacy on-prem and hybrid multi-cloud environments, makes it essential to choose partners carefully. Point solutions may be part of the puzzle but the ability to integrate them requires a holistic touch.
Hitachi Vantara is among the select companies with this depth of experience, cited by industry analysts and trusted by leaders in the global BFSI sector. Examples include:
Leading European Bank Cuts Discovery Time
A leading European Banking client of ours, which serves +9.1M customers, has operations in 38 countries, each with its own unique set of regulatory requirements. Working closely with their team, we designed a flexible solution to track and manage digital assets in a single centralized dataset. Built on the Hitachi Content Platform, we created an “ingest and search” data platform capable of automatically collating, securing and indexing structured and unstructured data across the business, making information searchable from the moment it enters the system.
RBI moves confidently to the cloud
Also in Europe, Austria’s Raiffeissen Bank International (RBI) embarked on a cloud transformation journey with Hitachi Vantara to rebuild its application landscape to be more accessible, agile and productive. The transition required a complete reclassification of data, with multiple categories of confidentiality to help dictate which data can sit in the public, which can be public but confidential, and which must be private. Today, everything at the bank is built with an agile, cloud-native mindset, using an architecture that can be shared and scaled across their entire network of 13 banks spanning Central and Eastern Europe.
Sustainability Risk and Compliance
Maximizing shareholder value today requires not only competitive business performance, but also transparency regarding a variety of environmental and social issues. At Hitachi Vantara, we understand the importance of playing a leading role in decarbonization and have developed a multi-disciplinary approach to respecting environmental boundaries that permeates our business.
For example, we’re currently working with a leading British bank to help them achieve their goals by incorporating ESG factors across their retail and commercial business. This includes enabling transparent project creation where borrowers create individual or aggregated project profiles that become visible to lenders. Project details can be based on planned specific projects, operational analytics or systemic change advisory services. The solution further helps find and match intermediate lending between borrowers and lenders, providing better terms based on transparent, verifiable reporting.
Getting the RegTech Discussion Started
Although BFSI firms are experiencing regulatory change and challenge across their businesses and complexity continues to increase, the right technology and partners can turn what some may deem adversities into opportunities to create real competitive advantage.
To learn more about turning potential risk into potential reward, download our new white paper, The Opportunity for Financial Services Risk & Compliance Technology Service Providers.
And to learn more about our broad range of technologies and services, and our years of expertise in the risk and compliance space, visit hitachivantara.com.
Vineeta Kumar is Vice President, Financial Services, Hitachi Vantara.