Rise Of Regtech To Transform Asset Management Back Office - Confluence

Josh O'Neill

20 December 2016

The rise of so-called regtech – a subset of financial technology that facilitates the delivery of regulatory requirements using technology-driven processes – will “transform” back office models within wealth management, according to US-based data manager Confluence.

The data-driven solutions firm said that throughout the past year the asset management industry has been faced with more stringent regulation that places increasing strain on industry operating models. Though firms have made headway in improving their approaches to data management, they have somewhat struggled to leverage automation to improve back office processes, Confluence said.

In 2017, regtech will trigger a transformation of current back office processes by combining improved data management models with innovative technology, according to Confluence. Although back office automation has been a central goal among asset managers for nearly a decade, it has remained fairly elusive due to the fragmentation of back office data, processes and technologies, the Pittsburgh-headquartered firm said.

“A year ago, asset managers were struggling to cope with data challenges that new regulatory mandates created. It’s a challenge our industry has faced for several years,” said Todd Moyer, executive vice president of global business development at Confluence. He added: “ is very much a function of the pressure that regulatory regimes have placed on the asset management back office over the last several years, but it also is an indication that the industry is motivated and ready to transform the back office to the same extent that the front office was transformed a decade ago. Firms are hungry for change. Regtech solutions that can deliver that change will be sought after in 2017.”

The regtech initiative - which was put in motion by UK regulators, according to Confluence – will spread globally as firms turn to disruptive technologies, one example being blockchain, to manage new regulatory requirements.

Confluence claimed that asset management firms that embrace regtech will be better positioned for longer-term success as the industry moves into a digitalized era.