RegTech is playing a critical role in reducing cost and risk while improving conduct and competition writes Jason Boud in Fintextra. The article sought the views of CEOs and senior managers with industry and regulation experience. The consensus is that RegTech is enabling institutions to move beyond damage limitation through clearer regulation taxonomies and proactive business models.
“There is no doubt the technology has matured, but more important is the understanding and acceptance by our clients has increased in the last 2 years. We see compliance (surveillance & reporting) as a recent use case but we add value by being able to understand team performance and behavioral decision-making.” Boud quotes Taras Chaban, CEO of Sybenetix.
Technology combined with regulation is a force for good that can transform incumbents, promote competition and create more transparency, Sybenetix CEO Taras Chaban told the Aberdeen Asset Management 2016 conference.
For example, the large amounts of data required under MiFID II can be considered as an opportunity for business improvement. “That data, if put to the right use, can actually change the way businesses operate. It shouldn’t be looked at as a cost. It should be looked at as a return on investment. An investment in my understanding of how my business operates, how my fund managers and traders do their jobs.”
AI should be deployed as a specialist ‘team member’ that excels in gaining insight from the data hose being created by new regulation, Sybenetix’s R&D President, Dr Paul Young explained at the recent RegTech Futures summit in Amsterdam.
“A supervised AI approach combined with expert domain knowledge is the key to supporting people, not replacing them.”
A growing range of algorithmic tools are being used to enhance compliance decision skills to deal effectively with the tsunami of regulation according to Sybenetix’s Wendy Jephson in a recent article for Thompson Reuters Regulatory Intelligence.
Behavioral Analytics is reducing compliance’s workload while zeroing in on activities that require closer investigation. “Technology is freeing up the analyst’s time to do more investigative work which might also lead to an enhanced relationship with front-office staff.” notes Jephson. “Knowing that once a certain type of trade is executed it will be flagged by an analyst will prompt more spontaneous collaboration and conversation with compliance, a behavioral change that should be welcomed.”
The FT reports on the potentially huge market for RegTech, driven by financial institutions needing to reduce cost when meeting new regulation and regulators supporting innovation.
“Companies such as Sybenetix are riding a wave of interest in using technology — such as cloud computing, artificial intelligence and biometrics — to help the financial services industry meet the tsunami of regulation unleashed since the 2008 banking crisis,” writes Martin Arnold from the FT.
Sybenetix's conduct and performance management system is recognized in Bain & Co’s report on how RegTech can deliver smarter, cheaper more effective Governance Risk and Compliance (GRC) for banks.
The report ‘Banking Regtechs to the Rescue’ references Sybenetix as one of a few technology providers improving the reliability of insights from data by applying machine learning. According to the report, Sybenetix is providing, “Market conduct services (that) analyze trading transactions with behavioral analytics and banks’ proprietary risk models to ferret out misconduct or fraud.”
Commenting on the report, Sybenetix CEO, Taras Chaban, said, “While there’s a lot of talk about RegTech, the reality is that core technology must deliver on driving down cost, boosting productivity and creating new standards."
Yuri Bender from Professional Wealth Management reports on the FinTech being used by Asset Management to changes its business model.
Taras Chaban is interviewed after speaking at FundForum International on how the interaction between digital and humans in asset management cannot only automate process, but drive more effective critical decision making leveraging the data used for compliance and market surveillance.
“This is all about how human beings can use technology to develop their skills further, helping them go from good to great. It’s not about how robots can replace humans.”
Leading UK-based fund manager Artemis has agreed a multi-year deal for Sybenetix’s end-to-end market abuse surveillance, case management and conduct management system. The system is designed specifically for the buy-side to deliver greater competitiveness and transparency in meeting new regulatory requirements.
“We’ve been working with Sybenetix for many years to understand how to improve investment decision making. It makes sense to use the same behavioural software to help us meet new regulatory requirements,” said Peter Saacke, CIO at Artemis. “Using Sybenetix to improve surveillance, manage conduct and improve performance gives us a competitive advantage and supports our philosophy of transparency.”
The FCA’s Regulatory Sandbox will move forward with industry support via Innovate Finance and a “FinTech bridges” programme will connect UK-based companies with global regulators it was announced at Innovate Finance Global Summit 2016. Speaking at the event, Sybenetix’s Wendy Jephson welcomed the additional support for companies delivering innovative solutions that help financial institutions become more transparent with greater efficiency. Participating in The FinTech Disruptor panel and interviewed on Breaking Banks radio from the Summit, Jephson said, “Regulatory pressures and costs are strategic issues that can be solved through a collaborative approach that adds business value and is replicable in multiple jurisdictions.”
Sybenetix made the list of hottest European FinTech companies for the 2nd year in row, selected from 1,200 innovators by a panel of leading financial services, technology and investment experts. Launched at Money 20/20 Europe, the FinTech50 2016 has more focus on risk and compliance companies. Sybenetix was selected due to growing traction with clients and its innovative behavioural analytics platform that’s making a growing impact on performance and conduct transparency.
Sybenetix has joined Innovate Finance’s Transatlantic Policy Working Group (TPWG), taking part in the first meeting at Google’s Washington D.C. headquarters. The group brings together key US and UK FinTech players to share insight and best practice in policy and issues that help accelerate that growth of FinTech and its impact in the UK and US. As a company operating in both markets, Sybenetix is sharing its experience of working collaboratively with regulators, financial institutions and other innovators to meet regulatory and transparency requirements in more effective and efficient ways.
Capital markets disruption and transformation is being driven by new software delivering transparency for investors, enabling greater competition and smarter compliance with regulation according to Taras Chaban, speaking at the London Stock Exchange FinTech Investor Forum panel discussion. Participating in the ‘Capital markets technology panel’, the Sybenetix CEO commented on key issues driving innovation including a growing desire for collaboration between FinTech companies, financial institutions and regulators.
Support for UK FinTech companies expanding globally was one of the key themes discussed by Sybenetix at a No10 Policy Unit roundtable with representatives from the TechCityUK’s Upscale programme. Attending on behalf of Sybenetix’s, Wendy Jephson said, “Creating a wider technology skills pool from our schools and by making it easier to attract top talent to the UK is a common challenge we discussed as a group. It’s important that people responsible for shaping policy get a chance to hear directly from fast-growth companies. I was able to suggest very practical support that would help the FinTech sector, such as creating a dedicated RegTech unit to promotes innovative and collaborative ways to apply new technologies to meet regulatory requirements globally.“
Wendy Jephson is interviewed in the Huffington Post on her experience as an entrepreneur in developing behavioural analytics with the multi-disciplinarian team at Sybenetix. “I’m working with an amazing team of very diverse talents creating behavioural algorithms that analyse exactly how investment professionals make decisions to build unique behavioural profiles. No one has seen this before and what’s really encouraging about it is that when people see it they say ‘well of course that’s what everyone needs and should be using”. The interview is part of series of profiles on ‘trailblazing women role models’ that coincides with Women in Fintech event by Innovate Finance on 8th March 2016.
Sybenetix has been selected for rapid international growth support by TechCity’s Upscale panel of top VCs, and established growth-stage companies. Chosen from hundreds of companies, Sybenetix’s scalable Enterprise Behaviour Analytics is an example of the data-led innovation that has potential to transform financial services globally. “Global pressures to deliver higher returns while being compliant with new regulations is driving our international growth. World-class mentoring through the Upscale programme will support our expansion activity,” said Taras Chaban, Sybenetix CEO.
Sybenetix features as a global game changer in a new FinTech campaign launched in City AM for FinTech Week to highlight the success of London as a centre for potential global businesses.
Julie Lake from FinTech City cites Sybenetix’s rapid success in establishing its enterprise behavioural analytics software platform and products. “It launched on The FinTech50 in January and in July was named one of the 2015 cohort at Accenture’s new Innovation Lab in Hong Kong. Its revenues have grown 300% and it now has a New York office.”
Sybenetix has been chosen by leading financial institutions to participate in Accenture’s 2015 FinTech Innovation Lab Asia-Pacific, based in Hong Kong’s Cyberport.
One of seven successful applicants from around the world, Sybenetix is the only behavioural analytics and London-based FinTech company participating in the scheme designed to nurture new technologies for the financial services sector with a particular focus on the Asia-Pacific region.
Over 600 global regulators and policy makers at IOSCO 2015 heard how Sybenetix’s financial innovation is enabling new levels of transparency into individual investment behaviour, which is helping to bring about cultural change in conduct management. Chief Behavioural Scientist,Wendy Jephson, featured as one of five global-best practice examples of financial innovation discussed at the conference which examined trends in products and technology and what these mean for firms, consumers and the futureof financial regulation.
US Business Editor, Alexandra Frean, examines in The Times how a new approach to behavioural finance is helping investors recognise and manage biases. Sybenetix’s Chief Behavioural Scientist, Wendy Jephson, is interviewed and explains the company’s software is the equivalent of a blackbox flight recorder of everything traders do. Emotionally driven decisions can be shown up in patterns in company data as a clearly as a mistimed kick in football. Compliance officers also get signals when a trader does something outside what they normally do.
BBC Technology of Business features Sybenetix as the pioneer in providing big data and behavioural finance to both invest more wisely and ethically. Sybenetix’s technology is highlighted as both helping investment professionals understand the cost of their biases in terms of profit and also helping to root out misconduct.
The story quotes Taras Chaban, chief executive of Sybenetix, as saying "Since the financial crash, all of these investment management companies are being hit by government regulations about conduct and market abuse. But our system can look for outliers in normal trading patterns and flag them up right after the trading activity happens so clients can investigate them."
The growing disruptive impact of Enterprise Behavioural Analytics on financial services was recognised at the inaugural Innovate Finance Global Summit 2015, where Sybenetix CEO, Taras Chaban, spoke as as one of the pioneers innovating in finance to over 700 people from the global financial technology industry.
Sybenetix announced it has secured a deal with a large asset manager to measure and manage decision-making skill, counter behavioural biases to improve investment performance. The agreement signals the growing disruptive impact of Enterprise Behavioural Analytics on financial services, the Summit was told.
Watch CEO Taras Chaban and Chief Behavioural Scientist Wendy Jephson explain why Enterprise Behavioural Analytics is so important for the financial sector and beyond. Filmed and the FinTech50 2015 event, both discuss London as a great hub for enterprise software companies to grow and how Sybenetix is expanding its customer base and presence in US.
Sybenetix is featured in a Forbes Magazine article on London’s flourishing tech scene by reporter Alex Konrad, who attended the British Tech Breakfast hosted by Mayor Boris Johnson, Arianna Huffington and Joanna Shields in New York.
Sybenetix participated in the event as one of Europe’s hottest technology companies on the Mayor’s US Export Mission.
CEO Taras Chaban is quoted saying ‘London’s position as a banking capital of the world, Chaban argues, makes it a natural location to find talent from different backgrounds and nationalities.’
Man Group PLC is expanding the use of Sybenetix’s conduct management software, Compass, across its investment manager firms from equities and personal trading to fixed income, while its performance management solution Edge will now be used by FRM to evaluate fund performance, having been successfully deployed with GLG.
The announcement was made by London Mayor, Boris Johnson at the British Tech Breakfast in New York where the best UK technology companies were showcased to US financial institutions and venture capitalists.
Sybenetix has joined Innovate Finance to help drive global adoption of Enterprise Behavioural Analytics and transform standards of investment performance and conduct management. Innovate Finance provides a range of support and networking opportunities for members including championing the UK as the global centre for financial services and technology innovation, fostering innovation and growth, and offering PR and marketing support. Innovate Finance founding director, Claire Cockerton, said, “Our range of services is ideal for companies such as Sybenetix, which is poised for accelerated growth, driven by customer acquisition and major investor interest.”
Sybenetix is joining London Mayor, Boris Johnson’s technology sector visit to Boston and New York, on the 9th-13th February. The company will be meeting with existing and new US-based customers, looking to establish US operations and broadening discussions with potential investors.
Sybenetix has been selected from nearly 800 companies for the FinTech50 2015 list of the most disruptive European fast-growth technology companies in the financial sector.
The company’s pioneering work with global financial institutions in Enterprise Behavioural Analytics was recognised by the panel from Google, Microsoft, Fiserv, Amex, Accel, Octopus, SVB and ICON Corporate Finance.
From Wednesday 28th January 2015 Investment Intelligence has rebranded as Sybenetix to align the company more closely with the Enterprise Behavioural Analytics category and drive growth, leveraging its pioneering work with leading hedge funds, banks and asset managers.
Bloomberg Markets Magazine reports on how Sybenetix’s Edge software is being used to analyze investment decision making and enabling individuals, managers and coaches to overcome behavioural basis such as loss aversion and confirmation bias. The article explains how Sybenetix, formerly Investment Intelligence, started with GLG in 2009. Specially commissioned graphics show how proprietary Edge metrics such as success rates, pay-off ratios that can be used to understand and improve investment performance.
Through its ‘Innovative Analytical Software (Behavioural Science) Award’, The Hedge Fund Journal recognises how Edge, road-tested with GLG, is enabling portfolio managers and CIOs to understand behavioural patterns, promote learning and improve overall investment performance. The article highlights how Compass’s ability to provide detailed scrutiny under detailed regulatory investigation can be invaluable.