We are in an age when financial institutions are embracing technology (AI, machine learning and RPA) to increase efficiency and reduce errors in their middle and back offices. However, it seems that some firms are preparing for new regulations like MiFID II by taking a different approach – throwing bodies at the problem.

Markets Media recently published a piece on IT spending in Capital Markets, which reviews FinTech Spending and Innovation in the Capital Markets, a research paper by Opimas.

Despite the hype surrounding RegTech, the Opimas paper contained something of a surprise. Whilst compliance costs have increased, most of the investment comes from increases in headcount, not in IT.

Opimas estimates that the global capital markets will spend $127 billion on IT in 2017.

Of this, only $6 billion will be spent on regulation and compliance IT. This number is dwarfed by the $22 billion estimated spend on pre-trade, $33 billion on trading technology, and $42 billion on post-trade.

Markets Media quotes Octavio Marenzi, the CEO of Opimas –

“Financial institutions basically have reverted to manual processes for a lot of the regulatory compliance issues…. Because these regulations are new and sometimes not terribly well understood, it is sometimes difficult to actually automate the process.”

So, is RegTech all hype? In our opinion, no.

During 2017 we have seen a significant uptick in financial clients using Xceptor to comply with new regulations.

So why are we bucking the RegTech trend? Probably because operational users are able to update the Xceptor platform themselves, providing the flexibility to quickly adapt as regulatory and compliance understanding evolves.

The complete article is available at