FintekNews is pleased to offer our weekly feature column 3 Questions. Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week, we’d like to introduce you to W. Todd Lawrence of Wolters Kluwer’s Finance, Risk & Reporting business, which provides integrated regulatory compliance and reporting solutions for financial services companies globally.
NAME: W. Todd Lawrence
TITLE: General Manager, Finance, Risk & Reporting, Americas
COMPANY: Wolters Kluwer’s Finance, Risk & Reporting
WEB ADDRESS: www.wolterskluwerfs.com
What does your firm do/offer within the fintech sector?
Rather than launch into some neat and carefully crafted explanation, I think it’s helpful to discuss the problem we are trying to solve for our customers to best define what we offer. As FinTek News readers are no doubt aware, global and local regulators here in the US are demanding ever-greater integration across business processes, more invasive and broader scope in management and reporting, and faster reaction to change with regulation. And I think it’s fair to say that siloed approaches are increasingly anachronistic. While many financial services firms have had to find technology workarounds in the past, this approach is clearly now insufficient as regulators are strengthening their focus on data structure and management. This is where Wolters Kluwer’s Finance, Risk & Reporting business comes in.
Our award winning OneSumX suite of solutions is used by financial services firms to manage a broad array of regulatory reporting, finance and risk obligations globally. Our technology and content expertise means we are able to offer integrated regulatory compliance and reporting solutions for managing ever more complex finance, risk and regulatory reporting obligations. This also includes our unique Regulatory Update Service, which is maintained by Wolters Kluwer experts who actively monitor regulation in approximately 50 countries, helping to ensure the solution is current at all times. Our Americas team, which I lead, is based in Waltham, Massachusetts, and we are noting a significant demand for our services, having hired a number of experts in recent months.
What do you believe the next major innovation in financial technology will be and why?
For us here at Wolters Kluwer we are firmly focused on RegTech developments. And when we refer to RegTech we are talking about innovations that are more than pure “regulatory technology.” As previously mentioned regulators are increasingly requiring financial institutions to acquire regulatory content and provide them with more complex reporting with vast quantities of data using a greater variety of analytical methods. The information acquired and provided cuts across different functions and departments and has to be consistent to meet the increased regulatory scrutiny.
Arguably, the most important aspect of RegTech is an ability to acquire and generate different kinds of data very rapidly from numerous sources, used for varying purposes with the ability to be reused for others. In addition, financial institutions are requiring a business analytics and intelligence component. This functionality enables institutions to use this vast trove of data to forecast, do predictive analytics and enhance their business, versus what was previously viewed only from a reporting purpose. This allows financial institutions to manage compliance and risk in an optimal way that also enables them to maximize financial performance. We are certainly well placed to help our clients navigate developments in the space.
How do you feel banks are adapting to the facet of fintech that your company operates within?
Let’s take a pertinent and specific example of how banks are adopting, or should be adopting, their approach to technology here in the US. The accounting standard Current Expected Credit Loss (CECL), which requires banks to calculate expected credit losses and incorporate resulting provisions into its P&L statements, really necessitates a flexible, adaptable technology solution that will enable closer collaboration among finance, risk and reporting functions. Certainly, leaders of institutions that adhere to US GAAP would be strongly advised to start thinking about the changes they will need to make between now and implementation (December 15th, 2019) to their technology and their activities overall.
CECL will require institutions to come up with their best estimate of credit impairments using their best predictions of the operating environment that they will face. They will have to supply much of this information daily. With so much on the line, an institution’s personnel must work together as never before, with all functions, particularly finance, risk and reporting, performing in concert. As a result, they will need to adapt to have tools that are organized the same way, as a fully integrated solution that doesn’t just conform to the desired holistic organizational structure, but strengthens it. Adapting to this change will be absolutely key and in the ideal scenario banks will adopt a CECL solution that is flexible, adaptable, consistent and, perhaps most important, durable so that it will be able to perform a range of complex operations simply and elegantly, and then perform them repeatedly.
Todd Lawrence is General Manager of Wolters Kluwer’s, Finance, Risk & Reporting business in the Americas. A seasoned mergers and acquisitions professional, he has spent more than 20 years in strategy, corporate development, sales and marketing positions during his career. He holds a BA in international political economy from Colorado College and MBA, with high distinction, from the The University of Michigan