Editor’s note: Chuck Senatore explains what to expect from his panel discussion at the Compliance Week 2019 conference titled, “Compliance by Collision: The Boston RegTech Meetup Case Study.”

Change is happening, whether we like it or not.

We founded the Boston RegTech Meetup to face the reality of the speed and magnitude of change confronting the financial services industry, our innovators, and our regulators. Our growing community of regulators, firms, startups, service providers, and thought leaders have come to recognize that the old ways just won’t work anymore.

In pulling this community together, we seek to create an environment where the order of the day is to bring together the various RegTech stakeholder perspectives, points of view, and insights to tackle these issues and set the stage for positive change. The idea is to promote “extreme collaboration.”


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The challenges facing our industry are considerable, and we need to address them together—lest they overwhelm us.

There are two examples that illustrate the nature of the challenges shaping our future.

First, we’re in a race to keep up with a historic data explosion. Data is the informational life blood that the industry and our regulators will increasingly be expected to access and be able to mine for insights.

Consider this: Ninety percent of the data created in the history of the world was created just in the last two years.

  • There are 25 quintillion bytes of data created daily. That’s 25,000,000,000,000,000,000 bytes each day.  
  • Every minute, we send 16 million text messages and 156 million e-mails.
  • And, in our firms, up to 73 percent of a company’s data goes unused for analytics.

Second, as technological capabilities increase, so do expectations and unique needs of customers, regulators, and our firms. 

For customers, they demand convenience, ease of use, and less cost. They want to make payments and transactions easily on their cell phones. They want to see their financial information in one place to get a mortgage online or to have algorithms inform their investment decisions. For innovators to make it easier and less costly on the front-end involves regulatory compliance challenges on the back-end. And we in the RegTech community need to make sure that we understand the problems and deliver on these desires while remaining fully compliant.

As for regulators, they, like us, are confronting expectations that they need to obtain better insights from their data. They, accordingly, are using increasingly advanced data analytical tools to ascertain and identify risk. We can anticipate that they would expect the same from us. Our regulators also have a separate challenge: how to effectively plug in to industry developments to enable them to better regulate. As such, our regulators are faced with the question of how to best participate in the innovation process.

Finally, our firms look to the compliance professionals to take a leading role in figuring out how to balance the need to innovate and deliver on emerging customer expectations with the challenge to do so consistently with regulatory expectations. 

No stakeholder can effectively address these issues in a vacuum. So, what is the Boston RegTech Meetup doing about it?

  1. We’re forming a community of industry incumbents and service providers seeking solutions to better scale and manage risk; innovators with the new ideas that might deliver these solutions; and the regulators who are working to better understand how to regulate these solutions.
  2. We’ve brought together startups and compliance/regulatory experts to identify and dissect regulatory challenges they may be facing. 
  3. We’ve had “office hours,” where startups can seek advice from industry incumbents and subject matter experts to help them navigate how to grow their businesses.
  4. We’ve had compliance leaders and RegTech entrepreneurs discuss how to promote meaningful engagement and informed regulation with our state and federal regulatory colleagues.
  5. We’ve taken a business case, such as payments, and brought together a well-known commentator, a late-stage, pre-IPO payments company, and a Federal Reserve official to discuss and debate challenges to innovation.
  6. We’ve focused on the risk management challenges of artificial intelligence, bringing together the perspectives of a former Fed CIO, a risk analytics expert, an AI thought leader, and the head of a business seeking to implement AI solutions.
  7. We’ve brought together current and former officials from the Financial Industry Regulatory Authority (FINRA), the Office of the Comptroller of the Currency (OCC), and the Arizona Attorney General’s Office to explore how regulators could learn from Arizona’s creation of a regulatory sandbox.

At the end of the day, our goal is to use collaboration and engagement to remove any friction that could frustrate responsible innovation. As such, we imagine a world where regulators, innovators, and industry learn from each other in real time while working jointly to identify and address emerging issues. We imagine a world where firms and regulators may someday be able collaborate in new ways, such as sharing insights from data available to all to detect fraud and suspicious transactions. We imagine a world where the time lags between identifying the problems to be solved, the germination of the new ideas to solve them, and regulatory responses to regulate them are shortened dramatically through frictionless engagement.

Analogizing to Moore’s Law, which suggests that computer processing power will double every two years, change is accelerating. Faster and faster. We have no choice but to shorten the cycle times between new ideas and implementation. And the best way to accordingly accelerate innovation is by having regulators, firms, and innovators devote themselves to “extreme collaboration” to make it happen.

Chuck Senatore is head of risk oversight for Fidelity Investments’ private equity, venture, and strategic investing efforts and founder of the Boston RegTech Meetup.