Lane Cipriani, executive director at TIQK

The challenges regtech providers face in creating effective tools shouldn’t be passed on to advisers, technology company founder Lane Cipriani says. It is the responsibility of the providers to find products for the market, regardless of how difficult that may be, he asserts.

Cipriani, executive director of TIQK – a company that scans advice documents for compliance – takes exception to the view, expressed by Matt Symons, chief executive of fellow regtech provider Red Marker, that advisers should come together and form more cohesive guidelines on documents so providers can create more effective tools.

“It [isn’t] so much a knock against Matt Symons,” Cipriani says. “I just feel like taking the easy path out and telling everyone else to change doesn’t do justice to the industry that we’re in.”

He says the regulation around compliant documentation is well defined. Getting advisers to go beyond this prescription voluntarily and further limit variance in their documentation is not an attainable goal.

“It’s unrealistic,” Cipriani says. “In the last couple of years, we’ve spent a lot of time with tiny licensees, mid-tiers, bigger enterprises, and the thing we’ve learnt is that they don’t change. They have embedded processes, they have policies and politics and everything else. As a small business yourself, you have to adapt to that.

“Our philosophy has always been, ‘Don’t try and change them, try and work with them.’ ”

He acknowledges that the challenges Red Marker’s Symons identifies are valid. While the industry has placed enormous faith in the ability of technology companies to come up with innovative solutions to increasingly burdensome compliance regulations, the lack of what Symons calls “stable problems” has made the task difficult. If advisers interpret regulations differently and write SoAs that are disparate, how can you create uniform products for them?

“It is a very hard problem to solve. Statement of Advice documents in particular have a lot of inter-related information,” Cipriani says. “There is definitely a gap between what is stated in organisations about their willingness to adapt and change and test new technology, and what really happens on the ground. It’s not a malicious gap, but there is nonetheless a resistance.

“But you’ve got to work this stuff around the way advisers work, you’ve got to meet them where they are. And that requires creative technology. It requires smart people.”

Cipriani also says fintech and regtech providers can get sucked into the lure of artificial intelligence – what he calls “the sexy stuff” – without accounting for more basic technology that may be more appropriate for the solution.

“What it comes down to,” he says, “is that you choose the right tools for the job.”

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