Regtech can help national regulator win the race for talent
A race for regulatory talent is about to begin. Regardless of the outcome of the Brexit negotiations, it’s almost certain many UK banks will relocate their headquarters or employees, and European financial capitals will swell in size.
National regulators need to prepare. They need to recruit the best and brightest talent to stay in control and maintain oversight. But talent is scarce and expensive – and that’s where regtech can fit in.
The cost of new regulatory talent
Brussels think tank Bruegel estimates that about 3,300 positions at the top five U.S. investment banks and more than $2.1 trillion of assets might leave London. They estimate the total number of job losses in London will be 30,000, with some other organisations expecting it to be as high as 300,000.
Many countries in Europe will be vying for these jobs, and the range of cities positioning themselves to benefit is vast: Brussels, Dublin, Frankfurt, Paris, Prague, Luxembourg City, Vienna and Warsaw to name a few. But with a larger banking sector comes additional regulatory responsibility; the national regulators will have to take on more staff to make sure that they have sufficient oversight. They will all be chasing the same regulatory talent.
A big new role for regtech?
Against this backdrop, regtech could emerge a winner. In the race for talent, regtech can stand up and step into the void. It’s a tool that regulators and compliance officers could use to fill this looming black hole.
But it’s easy to misunderstand this argument, or use it to create low-level panic. There’s a constituency who want people to see regtech as a threat to jobs. They want you to see regtech as a tool to create the cost efficiencies you need to strip out the human element.
Having a wealth of regtech in a city will also position it for another big, important battle. The one between EU countries for the headquarters of both the European Banking Authority (EBA) and European Medicines Agency (EMA), both of which are expected to be awarded before the end of this year. A vibrant regtech community will help these cities stand out. Bloomberg recently reported that some cities were touting their paintballing and spa options – having a regtech cluster must surely be a bigger draw.
Mark Holmes is CEO of Waymark Tech