In 2018, we are at a RegTech inflexion-point, where Frost & Sullivan claim the global RegTech market will reach $6.45 billion by 2020. This growing success means RegTech is ripe for saturation.
You have built a transformative product, grown a powerful team & gained traction. How do you scale your RegTech to withstand the pressures of a saturated market?
Being bogged down to a one-box solution
With MiFID II, and GDPR looming, it makes sense to position your product as one to solve immediate regulations. Putting your product into a GDPR-shaped box will undoubtedly resonate with the market.
However, as you scale, this dangerously risks the ground in which you can play. Anastasia, Head of Partnerships at ClauseMatch speaks in relation to this problem that “implementing “quick fixes” in silos has only added more loops to the already inefficient process, doing nothing for the banks to help them fight complexity. Answering a specific problem will get a meeting, but banks are demanding answers on how to stop the cycle once and for all.”
Regulations exist because something is broken, & RegTechs must seek to solve the inefficiencies at the source.
“There is a revolution happening within the banks, and instead of going for another patchwork, they are demanding answers on how to stop the cycle once and for all.”
You must not be reactive, but pre-emptive to regulatory change, and only then will you achieve longevity in the market.
Trying to be all things for all people
An influx of regulations is a pain that resonates across vertical, across country & across sector. However, you cannot target them all. Every industry is affected by these regulations in a nuanced way, and the solution you provide must comply with these nuances.
Financial services (FS) and pharmaceuticals are heavily regulated, but their drivers are entirely different. FS need compliance whilst driving the front office performance. Their concern is reducing overheads, facing regulations and taking control of operating costs. The pharmaceutical industry, however, is driven by staying competitive through pace to the market & IP development.
Appealing to heavily regulated industries is not a one-size-fits-all: your strategy must be nuanced to lead in the minds of industry leaders. This way, you can dominate in one vertical, rather than being mediocre in all.
Building up barriers
Famously slow moving and scared to adopt, FS need to now act fast. Data is the new oil, and the race has begun for FS firms to develop, or implement the right product to solve their regulatory burdens.
If you build up barriers to implement your product, you will lose the race to win in FS.
The promise of security & fast implementation is vital here. Cloud-based solutions must consider their security promises, and you must prove you have the right technology to filter out the noise? Regulation takes years to implement and even longer to deregulate.
You may have built an immense product, but in a landscape where firms need to act fast, how easy your product is to implement will stand up against competitors.
