Britain’s financial regulator called on Friday for the regulatory technology industry to press their own case for the greater adoption of cost-saving ways to automate compliance and spot money laundering, rather than expecting it to do so.
A report by the City of London Corporation said that annual cost of compliance for Britain’s top five banks could be cut by at least 0.05%, or a combined 523 million pounds ($720 million), by the greater use of so-called RegTech.
The report called on regulators, alongside industry, to step up the use of RegTech to make finance more competitive and said it should be “a regular topic of conversation” between them.
But regulators said it was not their place to take the lead.
“A technology shift that is led by a small number of people in the public sector making choices does not strike me as a good technology shift,” Bank of England Deputy Governor Sam Woods told a launch event for the report.
RegTech is part of Britain’s wider so-called fintech sector that is a central plank of the government’s strategy to build a more globally competitive financial sector after the City of London was cut off from Europe by Brexit.
The report said the use of RegTech, however, was held back by long procurement cycles, slow decision making inside firms, constraints from existing technology and lack of funds.
“Supporting individual firms or individual technology is not necessarily where we are at,” Sheldon Mills, the Financial Conduct Authority’s executive director for consumers and competition, said.
Mills said the report should help the RegTech sector, which employs 68,000 people, “sell itself” and expand.
“It’s up to the market, up to the firms, to go out and make that happen,” Mills said.
For the industry, Adriana Ennab, director of public policy Europe and UK at Credit Suisse, said firms should not be building their own silos, but coming up with joint solutions given areas like compliance were not “competitive” issues.