The industry body for the burgeoning regulation technology sector – the RegTech Association (RTA) – has announced the addition of Microsoft to its membership ranks.
The group, established in 2017, also revealed Bank of Queensland chief risk officer, Peter Deans would be joining its board.
The association said the announcements were “significant milestones” in its mission to “position APAC as a global center for regtech excellence”.
“The capabilities these appointments allow underlines our readiness to accelerate a new compliance ecosystem for the financial sector – and subsequently for other regulated industries,” said RTA’s Deborah Young, who was named as the association's first CEO in September.
The cost of compliance for Australian businesses is high and rising. Deloitte Access Economics estimates that federal, state and local government rules and regulations cost $27 billion a year to administer and $67 billion a year to comply with.
According to KPMG, the big Australian banks spent between $350 million and $450 million on regulation and compliance each year. More regulation of the finance industry could be recommended by the ongoing Royal Commission into Banking. There's also the significant cost of non-compliance.
In 2017, according to Thomson Reuters Regulatory Intelligence, 56,321 regulatory alerts were issued from more than 900 regulatory bodies worldwide, an average of 216 updates a day – one every nine minutes.
“The financial sector faces digital disruption, constant innovation, increased regulatory scrutiny and changing business models. As a leader in the AI space, our role at Microsoft is to help regulators and regulated entities to deploy AI as a solution for these issues. The RTA is a vital point of collaboration for the industry and a bridge for those discussions. We’re excited to be joining their membership at this crucial time for the future of Australian compliance,” said Duncan Taylor, director, financial services, Microsoft.
Australian regulators are also exploring how regtech can improve outcomes. In May last year, the Australian Securities and Investments Commission announced it was establishing a regtech liaison group to enable "collaboration opportunities that promote positive applications of regtech". In February the commission issued tenders for pilots that apply natural language processing to 'regulatory problems'.
‘Proactive government’ and ‘legal informatics’ were named as two areas where Australia can make the biggest gains in digital innovation by Data61 CEO Adrian Turner earlier this year.
“This next digital wave to revolutionize existing industries and create entirely new ones is ours to capture. But the opportunity is perishable if we don’t collectively take action now,” Turner said.