Compliance Without the Pain: Financial Regulation Made Easy

Financial Regulation

Interview with Rohini Gupta Rohini, Director and Lead Regulatory Advisor at FinregE.

In highly regulated industry sectors, much of businesses’ time and resources can be consumed by compliance-related activities. However, as Rohini Gupta of regulatory compliance software developer FinregE explains, the appliance of artificial intelligence and machine learning to the problem can alleviate the compliance burden on companies, while improving productivity, reducing risk, and removing obstacles to growth.

It’s great to have you on board, Rohini. Thank you for your time. First of all, I’d love to know what made you decide to get into the regtech industry. 

My passion is regulation and what really interests me is understanding how machine learning and artificial intelligence (AI) can be utilised to convert lengthy laws and regulations into a set of actionable requirements.  

My interest in regulation began while I was working in trading and sales, when the financial crisis hit and regulations were tightened. Here, I worked to implement regulations and manage risk and compliance across governments, private sector banks, and financial institutions. I had to do everything manually, from working with regulations to demonstrating compliance with regulatory obligations, and everything in between. It was around this time that I also met my co-founder at FinregE. We worked together to explore methods of streamlining these processes so they could be coded into a machine and retrieved within seconds.

Together we founded FinregE three years ago, a regulatory compliance software solution to solve the problem of managing compliance with existing and changing laws and regulations.  

What does your current role entail? What does an average day look like for you? 

Although I am a co-founder at FinregE, my role exists within many varying aspects of the company. We are only a small startup, so I would also say I’m the salesperson, account manager, marketing executive, and IT support!

As a founder of a startup, no two days are the same, and that’s what I love about my job. One minute I’m getting involved in a lead that comes in for a demonstration and the next I’m writing a blog for the website. I love every aspect of our company and my role, because I get to work at the heart of it all.  

What are some current trends that you’re seeing in the regulation and compliance industry?

Currently, the focus of many companies is the sustainability angle, with keeping on top of the fast pace of change in guidance, regulations, enforcements, and requirements being released in this space. The focus is now on the utilisation of technology in managing green finance, climate and environmental risks. The regulatory framework is still being developed and finalised in this space. However, there is still substantial scope for institutions to leverage the power of technology to analyse already-available data and approaches for understanding an institution’s environmental footprint and its connection to climate risks.  

Are there any unexpected uses for machine learning/AI that could be interesting for our readers to know about?   

One area that we are passionate about is using ML/AI to build a comprehensive data source for relevant regulations, guidance, expert judgement, case studies, and hazard maps related to climate and environmental risks. Feedback from our existing clients indicates that they require a solution that provides them with: 

  1. Structured information on the evolving nature of climate and environmental risks in a single place;
  2. Reliable information on expert judgement, case studies, and data related to physical and transition climate risks which are auditable and transparent  and can be traced back to external data sources;
  3. Effective workflows to filter and use the information to determine institutional exposures, impacts, and actions required. 
The focus of many companies is the sustainability angle, with keeping on top of the fast pace of change in guidance, regulations, enforcements, and requirements being released in this space.

Through the use of ML/AI technologies, globally scattered information on climate risks can be gathered and structured, labelled, and summarised across publications, laws, research, and guidelines. ML/NLP will be applied to climate-related publications around the world for statistical analysis to gather existing data, classify data, and capture relationships between data. It will also permit the creation of a climate risk dictionary of associated data needed by companies to engage in sound climate-related risk management and to scale up their investment in sustainability and financial resilience.     

Some companies may think of regulatory compliance as a headache. What would you say to these companies? Can regulatory compliance help growing companies?

Businesses can look at the tools behind FinregE, such as machine learning and AI, as a way to free up resources and remove obstacles in the way of their growth due to the cost of regulatory compliance. 

Regulatory technologies (regtech) enable institutions to satisfy regulatory and compliance requirements more effectively and efficiently at a lower cost. Adopting ML and AI into tedious compliance tasks such as the processing of large-scale regulatory textual data can remove manual tasks of regulatory information interpretation and retrieval. This minimises errors from human processing, thus reducing risks and costs, at the same time as improving productivity and compliance employee retention. These results combined can help companies become more profitable, which can also incidentally support their growth.

During my time as a regulator in financial services, I’ve seen companies’ growth strategies/goals hampered by regulatory fines, as regulatory compliance is often secondary. Companies looking to grow into new products/markets/business lines can save significant costs and time in complying with new regulatory requirements of new domains by adopting regtech in their compliance. The costs saved can be passed on to consumers through lowering product prices, and give them more money to bring to market more innovative service offerings, and also improve competition.              

You’re a self-funded startup. What advice do you have for other startups that are in the same position as you were at the start of your journey?

As a self-funded startup, there are challenges that we have faced that are specific to self-funded businesses. For example, we have sometimes struggled to hire staff as quickly as we wanted to and to decide who to hire when our budget permits only one new position, thus limiting our ability to grow staff freely. In addition, being self-funded requires you to be not only a CEO but also an admin keeping a close eye on your cash flow.  

My advice to other self-funded startups would be to select where you invest your money very carefully. Marketing, for example, is very important. Having a good, clear website, with engaging content and the right keywords for your domain can really help grow visibility and gain customers. Also, at the start of your journey, get your company, vision, and mission out there amongst your network as much as you can, and listen to the feedback you receive on it from your potential clients. Don’t be disappointed by criticism; it’s a form of communication/feedback and can sometimes also turn into your IP. If you get a customer to tell you how to make your product/service better, that’s information no one else has, and that puts you at an advantage over your competitors. 

What are you proudest of about FinregE? 

One of my proudest achievements at FinregE so far is winning an Innovate UK Smart Award from the UK government to complete a project in NLP/machine learning for financial services regulation, which has allowed us to partner with one of the best colleges in the world, Imperial College.

My advice to other self-funded startups would be to select where you invest your money very carefully.

With a success rate of only 5-10 per cent of applicants per round, the Smart Award competition is one of the most competitive funding streams there is. As it’s an open call with no specific theme, the process is even more competitive, since applicants must put forward a strong, convincing application for innovation. 

From the beginning of our application, we already had a vision of effectively applying machine learning to regulations with the purpose of making compliance with regulations easy. Now we are over halfway through our project and are happy to report that we are supporting the UK government’s Future of Finance Vision and Better Regulation framework. We have also already made strides in the areas of building digital, machine-readable regulations and using machine learning to ease the processes of understanding regulations. 

How has your organisation established a strong relationship with its clients? 

We are really proud of who our clients are and the fact that they decide to work with us. These clients have chosen FinregE over our competitors, such as Reuters, IBM, Wolters Kluwer, and other regtech incumbents. In the space of just three years, we have some of the biggest, if not the biggest, institutions in the world across different financial services domains and sectors in our growing client base. We have managed to secure these clients due to the customer service principles and ethics, and our strong belief in our mission statement of making Financial Regulation Easy©! 

We like to work with our customers as strategic partners, implementing our solutions and software for them aligned to their challenges, vision, and goals in driving improvements in their regulatory compliance environment. While our software fits off the shelf for our clients, we still offer customisations to meet our clients’ existing processes and way of doing things. This can be very simple, such as changing the name of a data field, to building bespoke dashboards, reporting, and visualisations to easily visualise their complex, multi-team, global regulatory footprint. 

We also listen to the feedback and desires of our customers, and use this to keep our product and software ahead of our competitors. Customer feedback is invaluable. We listen to these views to tell us not only what’s good, but what we can do which isn’t currently being done, or to do what we are doing even better.  

Lastly, what is your hope for the future of FinregE, and do you have any plans moving forward? 

The future is bright for FinregE. Our vision is to pass our competitors and become the most trusted regulatory compliance vendor for financial services. 

We have also seen organic growth across different industries. We have already launched EnregE, a sister company in energy, and our plan moving forward is to expand further into even more industries. 

This article was originally published on 25 October 2022.

Executive Profile 

Rohini Gupta Rohini

Rohini Gupta Rohini is the Director and Lead Regulatory Advisor at FinregE. Rohini has over 15 years of experience in a wealth of areas including asset and wealth management, investment banking and retail banking, capital markets and financial services. Rohini started FinregE in 2018 and is the brains behind FinregE’s regulatory interpretation and compliance workflow solutions, which are designed based on her extensive hands-on experience and domain knowledge in regulation and compliance. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.