RegTech is considered the sweet spot in the digital transformation of the financial sector. A new core banking adapter brings the compliance expertise of Investment Navigator into the core banking system.

For start-ups, the integration of their services into core banking systems remains a major hurdle. The core banking systems are only slowly opening up. Most banks in Switzerland rely on Avaloq, Finnova or Temenos as the backbone of their operational IT infrastructure. In recent months, however, there has been some movement in the industry. API's - programming interfaces between IT systems - are booming and establishing themselves in the Swiss financial industry.

Investment Navigator, a RegTech company specializing in suitability, has now successfully launched an adapter for integrating its services into Avaloq. «n addition to our web solution and API, the core banking adapter for Avaloq offers another efficient way to consume our service,» says CEO and co-founder Alberto Rama.

This was made possible by a cooperation with the consulting and software development company Confinale, which conceived and developed the technical connection of Investment Navigator to Avaloq's core banking system. «A major customer brought us together for this exciting project. In the future, all banks will probably need a digitized product suitability solution. The processing of Investment Navigator data fully integrated into Avaloq opens up a wide range of applications for a bank that go beyond compliance,» says Jonas Misteli, Partner at Confinale.

RegTech as a Saviour of the Cross-Border Business

The fact that a RegTech now has the integration possibility into the leading core banking system in Switzerland is an additional sign that RegTech is gaining more and more importance in the financial industry. No wonder, as the requirements and thus the costs for regulatory compliance are constantly increasing. According to estimates by the University of New South Wales, banks could save up to USD 15 billion per year globally through the consistent use of technological compliance solutions.

Investment Navigator's Suitability Service replaces time-consuming and error-prone manual processes. The automated cross-border suitability takes the place of the country manuals, whereby the app checks which services and banking products may be offered to foreign customers. Additionally, product suitability information on ISIN level protects against misselling, by considering among other things sales restrictions (e. g. for MiFID II, ensuring «Target Market») and tax data (e. g. in relation to the German investment tax reform 2018).

When Investment Navigator was launched more than three years ago, renowned fund houses were involved in the suitability innovator for this reason. «Investment Navigator brings more transparency and security into the investment process. As a fund house, we also benefit from a higher quality of advice» explains Daniel Durrer, Head of Institutional and Fund Distribution (Continental Europe) at GAM.

Tobias Grimm, Corporate Secretary AT RobecoSAM says «RobecoSAM has always been ahead of its time. With Investment Navigator, too, we quickly knew that we wanted to be there right from the start. We recognized that it would be a great relief for our intermediaries to be able to meet local and international regulatory requirements at all times during the advisory and investment process.»

The Future Belongs to the «Cloud Suitability»

Many banks are entering now a RegTech wave. «We are currently experiencing strong customer demand. Above all, however, we believe that the interactive provision of cross-border suitability for the cross-border activities of financial service providers will become a commodity in just a few months' time,» predicts Julian Köhler, Chairman of Investment Navigator.

To be able to make a good investment in the banking infrastructure, he advises to think in tool ecosystems: «regulatory compliance in the investment process must be applied at various critical points, but fund research and client advisors, for example, do not use the same tools. It is therefore important to ensure that a suitability solution can be used in various applications along the entire value chain and offers its own tools. Our Cloud Suitability approach already guarantees this today.»