About Regnology's external growth strategy.
Focus on the recent Invoke acquisition.
On the heels of Regnology’s acquisition of Invoke, CEO Robert MacKay unpacks what the recent deal momentum means for Regnology, and for the RegTech and SupTech industry at large.
Regnology has made a string of acquisitions over the past year, culminating with your deal to acquire Invoke last month. Can you tell us what these acquisitions mean for Regnology and what the next steps are?
We’ve been fortunate enough to grow pretty fast organically. There’s been an opportunity to acquire quite a few subscale businesses in the spaces we already operate in. In some cases, these have brought us new modern cloud-native technology. In others, they brought us a geographic expansion of our overall business.
The key theme is they've kept us to the same business mix that we've been in the whole time — regulatory reporting, supervisory collections, and tax reporting — but have given us the ability to grow our scale fairly considerably.
This deal puts us in a very strong position in France and brings further scale to our supervisory collections and tax businesses.
Robert MacKay
CEO
Regnology
Your most recent acquisition of Invoke was the biggest of them of all. What does this specific deal mean for the company and the industry?
Regnology and Invoke, despite the differences in scale, had a remarkably similar mix of business. Invoke is the leader in France in regulatory reporting, but it's also a significant player in tax reporting and, alongside Regnology, the only other player really focused on supervisory collections. With the acquisition, Regnology is now a very substantial, comprehensive provider of RegTech, SupTech and tax reporting solutions on the market today.
From a geographic perspective, Regnology already had an established presence in the French market, so between Regnology and Invoke, we have the overwhelming majority of the top French banks as clients and are by far the leading player in the French market. This is key because the French market is going through substantial change, with banks looking to outsource a considerably larger section of their workflow than they had done previously.
In summary, this deal puts us in a very strong position in France and brings further scale to our supervisory collections and tax businesses.
What can current customers of both Invoke and Regnology expect as a result of this acquisition?
Invoke customers can expect continued service as they've been used to receiving, but with the integration of Regnology's regulatory reporting stack into the Invoke stack. We can now provide a greater range of service and end-to-end regulatory reporting, creating integrated workflows between regulators and the regulated. With this best-of-breed approach, banks will now be able to outsource a greater part of the regulatory reporting stack than they had done previously. We've already seen considerable interest in this from French banks prior to the transaction, and we think it's going to be even more compelling for the French banks now.
For all customers, and really the industry as a whole, the acquisition reinforces our core product strategy of creating integrated workflows between banks and regulators, what we refer to as ‘first mile, last mile.’ Invoke has been doing just that in France so it fits nicely into our overall global strategy.
The acquisition reinforces our core product strategy of creating integrated workflows between regulators and the regulated, what we refer to as ‘first mile, last mile.’
Robert MacKay
CEO
Regnology
In terms of growth, do you have global ambitions or plans to expand beyond your core European base?
Regnology's business is already global. If you look at the supervisory collections business, we're really the only player in that space, with clients all over the world. And we have a global client base for our tax reporting business as well. And while our regulatory reporting business is largely European at the moment, we already have teams building out North American solutions and existing products in Asia.
We do have further global ambitions, and we'll be growing the footprint outside of Europe in the reg reporting business pretty strongly. Obviously, with regulators located over the world, we have an automatic head start in serving the regulators from those jurisdictions.
Do you anticipate more acquisitions for Regnology?
The simple answer is yes. The slightly longer answer is there is a long tail of subscale players in the RegTech space, national providers of reporting. Having achieved a strong position in one national market, they frequently fail to scale outside of that market, so it's an obvious opportunity to bolt onto Regnology's existing business.
We’ve actually seen other large players in the reg reporting space looking to cut their investment in the space. Regnology is the only one that's been actively increasing our investment, both organically and inorganically, and frankly, that's only going to continue.
What do you see as the future of regulation? What needs to happen to move the industry forward?
Regulation is clearly being driven by the regulators, who are very keen to see the costs of regulation to the industry being reduced over time. They're always wanting to be reactive to the latest financial crisis. So how do we see regulators getting there? It's through the consumption of granular data. What does that mean? In reg reporting systems, we suck data out of core banking systems and treasury systems, wealth systems, a wide range of systems in banks, and then normalize that data. Then, depending on the regulator, we either submit the normalized granular data itself, or deliver it via templates based on aggregated, calculated data derived from that normalized data.
It’s that submission of normalized granular data that represents the future of reg reporting — it means regulators can query that data any way they want, as opposed to having to go back to the banks or the insurers each time they want more information. We see that with the European IReF initiative, and you see it with several other initiatives around the world. For the industry to move forward, supervisors need to modernize their technology to enable the consumption of daily granular data, and Regnology is committed to delivering the tools required to get them there.
Discover the Regnology platform and solutions
A unified approach to address increasing regulatory complexity and higher data quality requirements.
Delivering a platform that streamlines the workflows of regulators and the regulated with a common user interface that enables the sharing of services and data and enhances communication.
Discover the different deployment options for financial institutions in their regulatory reporting needs, pros and cons for the cloud options, and the shift from traditional in-house systems to managed services for greater flexibility, cost efficiency, and access to specialized expertise.
Explore the pros and cons of the two main types of regulatory reporting systems, and how RegTech solutions are helping to support a move to third-party offerings.
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