The effects of Covid-19 are still being felt across the whole financial landscape after the shock of a 30% drop in the stock market back in March. A changing investment environment is only set to add impetus for greater collaboration and renewed risk evaluation. Now, the ability to outsource compliance through the use of technology and software is helping fund managers during these challenging times.
Lawson Conner is a provider of outsourced compliance solutions and software that help businesses navigate regulatory infrastructure, reporting and risk requirements amidst variations in regulations under a global digital landscape. In 2018 it became part of IQ-EQ, the world’s fourth-largest global investor services group (by revenue) that combines global expertise with a focus on client service delivery.
Executive Director Andrew Frost explains how the company, founded in 2010, has grown with the rise of fintech solutions.
What has been the Lawson Conner response to financial technology innovations?
At Lawson Conner we’ve really challenged ourselves, and I believe succeeded, in successfully responding to the ever-changing Regtech/Fintech industry. We know there are many global organisations which struggle to keep up to date with the latest compliance regulations, and in this day and age, rules are becoming more complex and burdensome for firms. Our response was to build a scalable compliance software solution to manage AML & KYC, compliance monitoring, risk oversight, PRIIPs KIDs production & Onboarding processing – all to minimise a firm’s compliance risk and processing time.
How has this changed over the past few years?
The wider FinTech and Financial Services industry has seen constant change over the last few years with growing regulatory scrutiny. As a result, we have seen a positive shift in institutional acceptance of FinTech/RegTech platforms to streamline these processes. It’s crucial that firms now keep fully up to date with the latest regulatory and compliance frameworks. This gives our team great motivation to think ahead and continue to offer innovative solutions through technology to make compliance easier and even-more cost-effective.
Importantly, one key positive which we believe has supported the global Fintech market is the togetherness of industry providers keen to collaborate and build joined-up solutions so that clients and customers can easily scale their existing infrastructure. It’s always pleasing to see industry partners working together to build technology integrations of the future.
How have you created a culture of change inside the company?
We are really focused on growing the team personally and professionally, and it’s at the forefront of our objectives to look after the well-being of all of our stakeholders. Our agile way of working means we can easily adapt and respond to the ever-changing requirements of our clients. Our team is comprised of fantastic young, tech-driven graduates and developers who are on the front-line of delivery.
Our team often take part in activities including yoga, flexible working and company events to support our ethos which is centered around a great work-life balance. We have many young tech-driven graduates and developers at the forefront of delivery who learn and grow into the business because of our employee-focused approach.
What FinTech ideas have been implemented?
We embrace technology and new ideas at Lawson Conner, it’s in our company DNA. I’m sure it’s carved into the culture of many FinTech-focused firms. Our MaxComply software solution is a fantastic example of our financial know-how and technology development coming together.
In the modern world, it is essential that regulated firms can understand the nature, scale and complexity of risk arising from their activities. The flexibility of Fintech software has come a long way and in some cases provides firms the freedom to select if they require a partial or fully integrated solution to meet their requirements.
I firmly believe that software is a great way to free-up company resources and allows firms to focus on their core business, this enables the software to do the hard work and reduce much of the risk involved.
What benefits have you seen from FinTech adoption?
FinTech adoption is fast-tracking the ability of firms to reduce cost, operational risk, resource requirements and processing time. Firms and consumers alike are now ever-more willing to ‘test and learn’ how these incredible technologies can automate and facilitate critical tasks to free up their day.
One key benefit that we have identified at Lawson Conner is how fast these technologies can be ready to support firms in a live environment. The pace of client onboarding is imperative for a number of firms (mainly start-ups) as their time to market could impact their ability to launch.
In addition, Fintech/RegTech platforms are supporting the reduction of operational risk for organisations globally. Modern fintech platforms are leading the way with security and identification of financial crime too, impressive innovations across the industry has seen wider opportunity to monitor and manage financial surveillance, money laundering and the potential to find terrorism.
Do you see any other industry challenges on the horizon?
The speed of regulatory change often does not keep up pace with the evolutions and launch of the Fintechs. Therefore, there could be some future challenges around how we can facilitate this moving forward.
The introduction of new digital currencies (cryptocurrencies), Distributed Ledger Technology (DLT) and blockchain platforms will also be a key consideration. The adoption rate of these technologies in some parts of the world is faster than others, and there could be some concern that there is a lack of regulatory monitoring in place. Differing global regulators appear to be at varying stages of building the appropriate operating and compliance frameworks.
The requirement for global firms to remain compliant with core-compliance activities such as AML & KYC is becoming ever more important. This places greater emphasis on firms to migrate to compliance technology platforms which eliminate risks and mistakes with manual processing. It reinforces the need for continuous Fintech innovation.
Can these challenges be aided by FinTech?
Absolutely, Fintechs are changing the way that industries adopt technology as a means to improve operational efficiencies. Regtech as a sub-set of Fintech is helping the wider industry with software and technology platforms which help firms to focus on what they do best, their core business. Innovative software and tech are overcoming many of the suggested industry challenges including the compliance oversight in line with regulatory requirements, and investor onboarding/due diligence.
As the adoption rates increase for the new technologies such as cryptocurrencies, it will place greater emphasis on regulators to innovate at the same rate (or faster!) as Fintechs who are arguably leading the way from a technological perspective.