How Muinmos has had a front-row seat to the RegTech revolution

As it prepares to turn 12, Danish RegTech firm Muinmos has witnessed the sector evolve rapidly since its inception. With more eyes on it than ever before, how does Muinmos look towards the future in the sector?

This May, Muinmos will turn 12 years old. Since 2012, the RegTech sector has gone from being virtually non-existent to elbowing its way to the forefront of the financial sector. Over the course of this time, the RegTech solutions have massively advanced.

According to Remonda Kirketerp-Møller, Founder & CEO of Muinmos, some of the biggest changes during this time have been in the areas of digitisation, automation and compliance. These have coincided with increasingly stringent regulation.

She said, “Regulators are becoming more aware of what’s happening in the market and what’s also taking place in terms of automation and digitisation, which is playing a huge part in the frameworks around regulation and the approach to compliance.”

The topic of automation has been hotly discussed over the past few years, with the onset of Generative AI at the end of 2022 rocket-boosting the discussion around it. In the view of Kirketerp-Møller, instead of the usual anxiety and worry around the technology, there needs to be an increasing embrace of the technology.

She explained, “There are many who are worried about automation and how it will take over their day jobs, but from what I’ve seen, the best compliance officers in the market are the ones who have embraced technology and automation, using tools to streamline and enhance processes and eliminate or mitigate the risks they’re sitting on..

“To be frank, without a deep understanding of technology today and the regulatory framework, you’re unlikely to secure a good job in compliance. Attitudes are changing and we feelthat the new generation at least are very aware of the fact that automation in any area is key, especially in the regulatory space,” she stated.

The rise of Generative AI has led automation to become front and centre of minds across the mainstream – and the Muinmos CEO explained that many didn’t understand the level of automation and digitisation or even AI before they had seen ChatGPT. She added, “Once humans start associating what’s out there day-to-day in terms of utilising it more on their own personal level, it starts making you think differently about the potential for AI-based solutions in the workplace.”

The rise of the technology has positively impacted RegTech. “The onset of Gen AI has definitely accelerated the uptake of RegTech solutions,” said Kirketerp-Møller. “Companies were realising there are tools out there like ChatGPT, and they were asking why they were still doing things the way they had always done them – so they started looking for solutions to meet this need.”

Obstacles to growth

While the RegTech sector is continuing to strongly grow, there are still obstacles for this growth to be long-term. What does Kirketerp-Møller see as the key challenges?

Whilst she sees much more understanding around the benefits of utilising RegTech in their businesses, Kirketerp-Møller emphasised that some obstacles are found where some processes are still very heavily reliant on humans.

Another key area that may prove to be a roadblock surrounds the area of regulation, especially about AI. Kirketerp-Møller said, “We’ve seen AI regulation coming out of the European Union recently, and of course, there’ll be many more acts that will come out from different parts of the world. Unfortunately, when the regulation is pushed out, it can create a different playing field, which can be difficult to handle for institutions and firms working internationally.

Doing onboarding right

Prior to the creation of Muinmos, Kirketerp-Møller was the head of legal and market data for Saxo Bank, dealing with issues that Muinmos looks to solve. What is the advice Kirketerp-Møller would give to compliance officers and onboarding teams for structuring the onboarding processes?

“I would say leveraging technology is one of the biggest challenges and opportunities we see today, especially when we’ve been dealing with large institutions such as banks. Technology is reshaping the way we work, but instead of being afraid of what technology can do in the workplace, it should be seen as a way of augmenting human capabilities.

“Therefore, the biggest advice we can give is to leverage and use the technology to see how automation can aid in the process of compliance, enabling compliance officers to spend more time on strategic, value adding activities, rather than on handling repetitive, data-intensive tasks” said Kirketerp-Møller.

This, Kirketerp-Møller stresses, means their jobs become more enhanced and more than just a tick box exercise. “We think one of the biggest rewards out of that is building compliance for the future and building regulatory experts that really understand what is happening in this space, leveraging all the datasets around it to enhance their job and their institution,” she said.

The onboarding process Is deeply important for any financial institution, and getting it right is vital. With this in mind, which stage is most important?

For Muinmos, the company deals heavily with the Know Your Client process, a process that is one of the biggest areas in terms of onboarding. “The reason for us why it is so important is because every single financial institution around the world can only survive by onboarding clients quickly, efficiently and compliantly, whilst also keeping their existing ones.

“This area has been given a huge amount of attention over recent years due to significant fines and a lack of compliance and investor protection, while huge numbers of institutions are losing business purely and simply from a client satisfaction point of view during the onboarding process.”

Whilst onboarding is vital, some financial institutions still struggle with the process. How can this be addressed?

Kirketerp-Møller explained, “At the end of the day, every institution has to go digital and has to move towards automation. It’s not a question of if, it’s more of a question of when.

“One of the challenges we are seeing, in particular in large institutions, is that many of them are simply not ready for it. Despite executives knowing they need to streamline their processes, cut costs and ensure compliance, we see they are not ready for it –they need to heavily invest in internal training and change management before they go out seeking digital RegTech solutions.”

She continued by highlighting that whilst such a change will be undoubtedly positive for the institution, they have to be ready for it, and many of them who do succeed have already designed a good internal change management function to take care of the process and ensure everyone at the company is on board.

Future plans

Going forward, Kirketerp-Møller emphasised Muinmos’ excitement about further partnerships the company has in the pipeline on top of its recent ZagTrader and FX Back Office integrations.

She added that, by enhancing connectivity through these integrations, Muinmos adds significant value to firms when they are ready to fully digitise their entire processes and turn onboarding into a real opportunity .

Kirketerp-Møller added, “It’s back to moving away from fragmentation. So, instead of those teams having to deal with the RegTech aspects of the data in one portal and then moving into a CRM and into other back-office systems, the connection is seamless which means that with a one-click entry point, they’ll be able to adapt their entire framework into one single unit from a tech point of view. It’s really powerful.”