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Saturday, December 16, 2017

Global tour in RegTech, FinTech, and Blockchain Conferences

Global tour in RegTech, FinTech, and Blockchain Conferences

By Cory Roberson, Principal at RIA Review, RIA Consults

Research into FinTech world
In a push for continuing education into all things FinTech, I hit the road to attend conferences in: Dubai, London, Hong Kong, Los Angeles, and the San Francisco bay area. 
As a compliance/RegTech entrepreneur, the purpose of these travels was to research the synergies and divergences in the global regulatory and FinTech landscapes. 
What is FinTech/RegTech?
Financial Technology (FinTech), in the investment management and broader securties space, includes robo-advisor solutions, trade reporting tools, back office applications, portfolio aggregation functions, and now, blockchain technologies.
Regulatory Technology (RegTech), is considered to be the ‘compliance’ component of FinTech. Compliance applications are either built into FinTech tools (e.g. AML/KYC utilities or trade compliance monitoring) or, as the case with our documentation platform RIA Review, they can operate as standalone applications.

U.S. Securities Regulators issue caution and optimism
Lately, the regulatory environment seems like the wild west in terms of Blockchain.  Given the unexpected rise of Blockchain-fueled technologies like cryptocurrency (ICOs), we believe that this level of innovation is outpacing compliance and opening the opportunity for scams and ‘bad actors’.

SEC Chairman expresses some concerns.  The SEC, through guidance from the DAO currency issue and the Chairman’s recent comments on cryptocurrency, did provide some clarity on the application of these securities instruments for ‘main street’ investors (average joe investor) and market professionals (advisors, funds, broker-dealers, and accountants).

In light of the cautious tone, Clayton’s comments do express a degree of optimism for the future of these technologies in the investment arena when he says, “I encourage Main Street investors to be open to these opportunities, but to ask good questions, demand clear answers and apply good common sense when doing so.”

Congress weighs in—not so fast.  The U.S. House of Representatives is currently reviewing a nationwide Bitcoin/Blockchain policy (HR. 835).  From a compliance standpoint, there is usually a lot of red tape and hurdles to pass before new rules are approved by U.S. regulators.  This is recently evident in the delays from the DOL Fiduciary Rule.  It could be another year before a vote is made in the House and the issues move to the Senate.

State Securities add their take on Blockchain, ICO’s and Cryptocurrency.  On December 13, 2017, the North American Securities Administrators Association (NASAA) announced their top emerging threats for investors in 2018.  

The NASAA’s Enforcement Section identified three emerging threats that investors should watch for in 2018 - initial coin offerings (ICOs), cryptocurrency contracts for difference (CFD), and identity theft for purposes of depleting investment accounts, especially among senior investors.

CFDs, which are prohibited from being sold to U.S. citizens or residents, are marketed through Internet platforms and regulators caution that some of these platforms can be fraudulent themselves.

The NASAA is the official association comprised of state securities administrators from the districts and states of the United States, from Mexico, and from the provinces of Canada.

Global Regulators push ahead

U.K. regulators are meeting these compliance challenges by the facilitation regulatory sandboxes.  Among the first launched in 2015, the U.K. Financial Conduct Authority (FCA) launched an incubator to provide regulatory guidance so innovative FinTechs could adhere to its compliance issues.

Overall, there are sandboxes in jurisdictions including Australia, the United States, Canada, Switzerland, Malaysia, South Korea, the United Arab Emirates, Hong Kong, Singapore, and Thailand. 

What are investments professionals and startups taking about?
Blockchain/IoT/AI Expo (Santa Clara).  After thanksgiving 2017, I decided to research more startups that utilize the controversial-but-innovative Blockchain technologies.  In my opinion, the controversy from the Securities industry stems from the potential opportunity of fraud from unregistered Initial Coin Offerings (ICO’s) and/or the risks from unvetted parties operating through blockchain (public/private key (ledger)) networks.

Advisors are also taking a look into Blockchain.  With the prominence of Bitcoin and the block-fueled cryptocurrency markets, investment advisors are beginning to ask more questions in the implications for the future.  In the first of likely more inquires, one of our clients brought up the conversation of Bitcoin with me during a recent quarterly review meeting for his SEC-registered advisory firm.

Fintech Diaspora Summit (Los Angeles).  In July 2017, I was invited to speak with a group of other FinTech entrepreneurs on the following:

What is the state of the current RegTech Ecosystem?
Which RegTech innovations are essential when building your FinTech startup?

In my presentation, I discussed points including: (1) The Intersection between government regulations and the greater FinTech market; (2) popular FinTech model(s), (3) Market opportunities, (4) compliance tech functionalities, and the (5) RegTech innovations needed when building a startup.

API World (San Jose). During a presentation of integrations using Application Interfaces (API), the speaker noted three big trends in enterprise level development space:

Composing Platforms (e.g. SaaS, IPaaS)
 Building applications
Launching AI-based functionalities

He lamented that these trends provide a market opportunity for consolidation of API’s onto singular platforms (e.g. Slack model).  Slack is a platform that integrates with enterprise level API’s and provides users with an opportunity to build their own products with their open API.  According to CB insights, the Enterprise infastruture as a service model (IAAS) markets are expected to reach more than $3.2 billion by 2021.

FinTech Applications for advisors. The rapid shift in platform and API development is now seen among investment advisory solutions in terms of back office, operations, financial planning, and portfolio management. Other presentations included a demo on the DocuSign API, one of the most common electronic signature providers used in the investment advisory space. 

RegTech Summit APAC (Hong Kong).  In March 2017, during a discussion on Privacy and Data Protection a group of senior executives and regulators from institutions such as Goldman Sachs, BNY Mellon, Hong Kong Securities Commission and Blackrock met to discuss trends in cybersecurity, privacy and issues surrounding centralized data vs. decentralized data sharing (using distributed ledger technology).

Other discussions included block chain development, global regulatory harmony, AML/KYC innovations, enforcement issues in APAC/US/Europe, API/integration tools, regulatory sandboxes, AI/automation possibilities for B2B, B2C, document review mediums, and open source platforms.

The general consensus was that the industry is still in the process of creating better technological solutions and innovative mediums to produce greater harmony with regulators.  In addition, presenters expressed that the future of KYC/Blockchain RegTech is based on the inclusion of regulators (e.g. growth in regulatory sandboxes) and an emphasis on more geographic solutions to solve the compliance needs of regulators.   

In 2016, I also visited conferences such as: FinTech Connect in London and MENA International Financial Forum & Expo in Dubai.  Based on my observations, more research is needed to interpret the future regulatory implications of these new technologies. We look forward to offering more regulatory solutions to help firms meet their compliance reporting obligations in light of changes coming to the industry. 

Email us at: or call us at: 650-305-2688 if interested in our compliance management software, RIA Review.

Compliance and Business Management

FIN Compliance ( is a consortium of compliance services including: RIA Consults-Roberson Consults Group, a compliance consulting firm, RIA Review, a compliance-management software tool (SaaS), B-D Review, a RIA/Broker-Dealer compliance management software tool, and FINLancer is a business management portal featuring:  E-signature tools; Invoicing integration, Vendor Directory, continuity directory*, business client document portal, and more (available by Q3 2019).  Access all services on one site:


FIN Missions ( provides business support group sessions for other entrepreneurs.  In addition, Cory has volunteered for more than fifteen youth programs in locations such as like S. Korea, China, S. Africa, Thailand, and India.

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