The lure of technology: Limits, practices and reality.
For those of us interested in the future of advice (and the far smaller number of us interested in compliance), technology - and, specifically, in regulatory technology (“regtech”) - is particularly appealing.
Well-designed solutions, customised and properly supported, can make advisers and licensees both more efficient and more effective. Better yet, the proper technology can be a source of competitive advantage in a highly regulated industry.
Even technology that doesn’t immediately improve the quality of your advice minimises the regulatory risk (and subsequent inconvenience) to your business.
I’ve written before about openAFSL, and talked about our commitment to providing you with technological solutions that “free you from the burden of compliance”.
That’s our vision and we work hard, everyday, to make it a reality.
We believe that better compliance solutions are based on individual needs and specific contexts. We promote customisation over conformity which is why I objected to a recent article on regtech. It read:
The industry needs a more consistent approach to compliant advice documentation so that regtech providers can create effective, scalable solutions, according to Red Marker director Matt Symons.
Technology “is a great servant but a bad master”.
Too frequently Advisers and Licensees adapt their business to the limitations of the technology presented to them. Instead, they should challenge the technology to deliver the solution they require.
If you question how profoundly your technology affects your business, ask you software provided to share your data on their systems with other systems or present them with an SoA template that’s significantly different from yours.
They may refuse or grudgingly agree if you’re prepared to bear the costs, but you use their technology to make your job easier; you’re not licensing their solution to make their job easier for them.
Some questions to consider
Whatever your business, there are key questions you should ask before you shackle yourself to any particular provider.
These following questions were first posed in our post “the reality of regtech” but they’re worth answering before you head too far down the implementation path.
What problem are you trying to solve?
What risk are you trying to manage?
Does it integrate into your existing systems?
What benefits and insights can it provide?
Is it scalable?
Is it easy to use?
Is it locally developed?
Personally, I’d also recommend you read Julian Plummer’s recent article in Fintech Business.
Julian offered nine questions you should ask your software developer.
I’m not competitive and not at all threatened by his publication of a longer list.
Although my next article will be “twelve questions you should ask your software developer”, I think that his questions are not limited to fintech solutions but apply, equally well, to any software or web based application you’re considering in your business.
For the record, the platform on which openAFSL is built has ISO 27017 certification.