With more services and applications moving to the cloud and with regulations in a constant state of flux across regions and countries, capital market companies face a maze of requirements in order to stay compliant.
BT Radianz, which is part of BT PLC, takes on the task of keeping companies compliant by offering a wide range of regulation technology (RegTech) applications. RegTech can include know-your-customer and anti-money-laundering applications.
All told, BT Radianz works with 440 different content providers to offer its customers a choice of more than 3,300 applications, according to Yousef Hafeez, head of business development for BT Radianz.
Europe's General Data Protection Regulation is just one area that banks and other institutions need to make sure they are compliant with as other requirements can vary from region to region and country to country.
"I focus on some of our very, very large accounts globally," Hafeez said in an interview with FierceTelecom. "Basically, what we try to do is help them grow their businesses, by supplying them with technology to help them to rationalize and reduce costs where needed.
"What we really try to provide them with is the services they need to be compliant, to trade and to improve their business efficiency. So that's where we fit in and we focus purely on capital markets. So if you look at our customers, they're all based globally."
BT Radianz, which was acquired by BT in 2005, provides its services in 70 countries including locations such as New York, Singapore, Tokyo, Australia, Europe, the Middle East and Africa.
To underscore the importance of capital market companies complying with regulations, BT Radianz co-sponsored a report that was produced by The Realization Group. The report said over the past 10 years the global banking industry has accumulated fines of around $321 billion, according to research from the Boston Consulting Group.
"That's ($321 billion) a big number, that's a massive incentive for firms to make sure they are fully compliant with these regulations going forward," Hafeez said.
In the same report, KPMG projected that RegTech spending would account for 34% of all regulatory spending by 2020. RegTech innovations and spending have dramatically increased according to KPMG, with global spending exceeding $55 billion in the first half of 2018.
Juniper Research also confirms this trend, with RegTech spending predicted to increase from $10.6 billion in 2017 to $76 billion in 2022. Despite institutions typically needing to spend around 10% of revenues on technology, research by Celent indicated that spending varies by region, with European banks accounting for just 32% of the $261 billion investment in 2018 by major global banks.
Hafeez said that a big emerging trend was the move to multiple hybrid clouds. A company's historical data could reside on multiple public clouds while their actual production and trading environments could be stored on a private cloud. BT Radianz works with all of the major cloud providers, such as Google Cloud, Amazon Web Services, Microsoft Azure and Alibaba. BT Radianz also uses BT's own cloud to provision the applications.
While capital market organizations may have been skittish about security issues in public cloud environments several years ago, Hafeez said they are now confident in the hyperscale cloud providers' ability to provide security environments, and they can include their own security measures as well.
"The cloud is a great piece of technology for compliance," he said. "You can put the same container on multiple clouds in parallel to having the same container on a private cloud."
In addition to the use of containers and the move to hybrid clouds, blockchain, artificial intelligence, machine learning, quantum computing and data center virtualization are also emerging technology trends over the next 12 to 24 months, Hafeez said.
"I think the adoption of containers is really exciting," Hafeez said. "I think it is visibly in its early stage. We are seeing more and more firms do it. It is definitely something our customers are doing and it's definitely something that is of paramount interest to BT as well.
"The other thing I would say that is interesting is that we are also going to see this technology used for different asset classes as well. So things like all of the compliance tools in the equity space being used in cryptocurrencies as well. We are looking at a very exciting time."
For blockchain, BT Radianz supplies the underlying infrastructure to enable organizations to run their blockchain applications on. Blockchain can be used for post-trade services and it can help companies be compliant with regulations across specific countries or globally.
"The other thing I would say about technology and compliances is that some people view that as a competitive advantage," Hafeez said. "They are willing to invest huge sums in new technology to be at the forefront.
"Others are very happy to stick to with existing technology or happy to follow the leaders. The reason I say compliance can be a source of competitive advantage is that if you have the certain tools available it may allow you to reduce, for example, the margins that you need to keep."