Accelerating Trade Partner Onboarding with RegTech

19th March 2024

Accelerating Trade Partner Onboarding with RegTech

In an industry where success hinges on strong relationships, insurance and financial services companies must prioritise integrity, trust, and diligence when forging new business relationships. However, navigating the intricacies of regulatory and statutory obligations often creates obstacles for these relationships from the start. The complexities of regulatory adherence have been cited to impede regulated firms’ abilities to effectively initiate new partnerships; hindering growth and stifling innovation. Now, with the growing emergence of RegTech, businesses can streamline compliance processes and accelerate trade partner onboarding, ultimately setting them up for sustained success.


In recent years, the insurance and financial services landscape has witnessed a concerning trend: a growing number of companies express frustration over the sluggishness imposed by compliance demands when initiating new business relationships. In REG Technologies’ 2024 Research Report, it was noted that a staggering 66% of general insurance and financial services companies feel statutory and regulatory obligations slow down starting new business relationships, a notable increase from the 47% reported three years prior. This statistic underscores a troubling reality: organisations are grappling with mounting compliance burdens, leading to missed revenue opportunities and hampered growth prospects.

Complex and evolving regulations, lack of data access, manual processes, multiple data siloes and associated compliance costs are just some of the influences hindering firms’ abilities to conduct necessary compliance assessments effectively before onboarding new partners.

Delving deeper into the data, a clear correlation emerges between company size and the time required to kickstart new business relationships. Larger corporations, with their expansive structures and intricate hierarchies, often bear the brunt of compliance complexities to a greater extent. Moreover, regional disparities highlight divergent regulatory landscapes, with UK companies facing more pronounced challenges compared to their counterparts in the US.

Know Your Customer (KYC) Procedures

Firms are mandated to conduct comprehensive KYC procedures to verify the identity of their clients and assess the risk associated with conducting business with them. This involves gathering detailed information about the client, including their identity, address, business activities, and beneficial ownership structure. KYC procedures serve as a critical safeguard against financial crimes such as money laundering, terrorist financing, and fraud.

Anti-Money Laundering (AML) Compliance

AML compliance is vital for insurance and financial services firms, involving robust policies, ongoing transaction monitoring, and reporting to authorities. Engaging with money laundering activities poses significant risks, including financial and reputational harm. Conducting AML checks helps identify and mitigate these risks early on, ensuring legal compliance and building trust with partners. By prioritising AML compliance, businesses demonstrate ethical conduct, safeguard themselves from penalties, and foster sustainable relationships.

Customer Due Diligence (CDD)

Customer due diligence is a fundamental component of establishing new business relationships in the insurance and financial services sector. Firms are required to conduct thorough CDD processes to assess the integrity, reputation, and financial standing of prospective clients. This may involve reviewing financial statements, conducting background checks, and assessing the client's risk profile based on factors such as industry, jurisdiction, and transactional history.

Compliance with Sanctions

Firms must adhere to international sanctions imposed by regulatory authorities and government agencies. This requires screening prospective clients against lists of sanctioned individuals, entities, and countries to ensure compliance with regulatory requirements and mitigate the risk of engaging in prohibited activities.

Legal and Regulatory Documentation

Before entering into a new business relationship, firms must ensure that all necessary legal and regulatory documentation is in place. This includes drafting and negotiating contracts, agreements, and terms of service that outline the rights, obligations, and responsibilities of both parties. Legal documentation may also include disclosures, disclaimers, and consent forms required to comply with applicable laws and regulations.

Risk Assessment and Mitigation Strategies

Assessing and managing risks associated with new business relationships is paramount for financial services firms. This involves conducting risk assessments to identify potential risks and vulnerabilities, implementing risk mitigation strategies to minimise exposure, and monitoring ongoing compliance with regulatory requirements and industry best practices.

Failure to comply with these requirements not only exposes firms to legal and financial risks but also hampers their ability to seize growth opportunities.


So, how can businesses navigate these regulatory hurdles and accelerate the initiation of new business relationships? The answer lies in embracing RegTech – a revolutionary approach that harnesses technology to streamline compliance processes and mitigate associated risks.

RegTech solutions offer a myriad of benefits, chief among them being the automation of routine tasks and the analysis of vast datasets. By leveraging RegTech platforms, businesses are empowered to navigate regulatory frameworks with agility and precision. Identity verification, due diligence, and compliance checks, once laborious and time-consuming tasks, are now executed swiftly and accurately, paving the way for expedited relationship commencement and smoother onboarding. These automated compliance principles continue throughout the customer lifecycle, ensuring continuous and complete regulatory oversight for sustained business relationship success and management.

In addition to expediting compliance processes, RegTech solutions also revolutionise onboarding procedures, from agency applications, terms of business agreements, and contracts. Through features like electronic signatures and automated management systems, centralised within a secure document exchange facility, businesses can significantly reduce the time and resources required for negotiations and signings. RegTech streamlines the entire contract lifecycle, from drafting to execution, ensuring compliance with legal and regulatory requirements, while accelerating the signing process. This not only saves time and resources but also enhances the overall efficiency and agility of business operations.

Furthermore, RegTech solutions are inherently scalable, catering to the diverse needs of businesses regardless of size or industry. Whether it’s a multinational corporation or a start-up, RegTech offers solutions tailored to meet the specific requirements of modern enterprises. This democratisation of compliance technology levels the playing field, enabling businesses of all sizes to compete more effectively in a globalised marketplace.

However, the benefits of RegTech extend beyond mere efficiency gains. By accelerating the initiation of new business relationships, RegTech instils confidence among stakeholders, demonstrating a commitment to compliance and risk management. By continuously monitoring regulatory developments and providing proactive compliance alerts, RegTech solutions help businesses stay ahead of regulatory changes and mitigate compliance risks. Moreover, by freeing up valuable time and resources, businesses can redirect their focus towards innovation, strategic growth initiatives, and value-added activities, driving long-term sustainability and success.

In summary, the blend of technology and regulations presents fresh opportunities for businesses managing compliance and fostering relationships. RegTech provides a route to streamlined operations, adaptability, and robustness amidst regulatory pressures. Embracing RegTech solutions empowers insurance and financial services firms to swiftly identify desired trading partners, onboard them efficiently, and maintain oversight throughout the customer lifecycle. RegTech enables businesses to take charge of their B2B trading, legal, and compliance risks, ultimately facilitating faster, smarter, and safer operations.

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This article was published by:

Article author:

Zoë Parsons

Zoë Parsons is the Marketing Manager at REG Technologies. With a passion for creativity, she is dedicated to driving the success of REG’s digital presence through innovative strategies and a keen advocate for diversity and inclusion.

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