Frank Manoukian from RegSharp explains how fintechs navigate European regulatory requirements across different countries. He describes regulators as increasingly collaborative with industry, and highlights the challenge of translating a single EU framework into national rules that differ by jurisdiction.
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Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.
Welcome to another episode of the Connector Podcast, and this time around with Fintech Belgium at DFS. And I have with me Frank from RecSharp. Can you tell us a little bit what you do and who you are?
Hello, Koen. Thank you very much. I'm Frank Manoukian. I'm Chief of Staff in RecSharp. RecSharp is a consultancy firm, French-based in Paris and in the south of France as well. And we are developing our expertise in a kind of crossroad between the regulatory bodies in Europe and the ecosystem of the fintech in trying to help them to get their, let's say, license when they are under obliged company regulatory framework, or in helping them in following up a lot of, say, requirements that they have into the financial service industry, like having a capital adequacy in line with the supervisory body or following up all the AML/CFT framework in order to be again aligned with all the regulations.
Actually, Frank, you're bringing some topics that are really close to my heart. We're talking RegTech today.
Yeah.
So talking regulatory changes and challenges, What do you see are the most biggest challenges that businesses are facing today? And then maybe secondary to that, how are you helping them?
Okay, this is the right point to begin. In fact, today what we are observing, and I would say more than today, for a few years now in Europe, is that the technology has definitely and deeply moved and made transformation in depth of all the financial services in let's say, revolutionizing all the what we call the user experience, the user usages, in terms of having an approach on the user-centric for all these services. What I mean is that the technology has changed the behavior of the consumer, and in that sense, all the regulatory environment has to, let's say, be being transformed in line with this kind of new usage. And that's where RegSharp is coming into action. And first of all, in analyzing and giving a qualification of what is the new usage and how it fits into the regulation in place. First of all, it's our being capable of assessing the behavior and the usage. Then to make this in music and to put this into orchestration with the regulation and all the supervisory body requirements so that first you need or not to have a license and then to follow up all the requirements that you have in this supervisory environment.
If I may, it almost sounds like it is first the behavior of the client and then the regulation. There's a huge debate in the industry? For you, which one is first, chicken or egg?
For us, I would say the first is definitely the client and the services they are looking for. And we have to cope with this. And we have to make the regulation body— but I think they understood more and more this. Because this is a different angle of our approach. As soon as you have a new usage, as soon as you have new needs, and this economic theory is saying a lot about this, then the regulatory has to put in place the quiet, the stable environment so that the innovation is really, let's say, put at the forefront of the ecosystem.
Do you see a lot of changes in the recent years? I mean, you already said that a lot of changes on the outside, but I mean, do you see like signs on the wall that also the regulator is following in this new way of thinking?
Yes, I definitely think so, in the way we are working all together. It is important here to mention that the regulation and supervisory bodies in Europe— talk about Europe here— is very interested in having a collaborative way of working with the ecosystem, in making, in gathering first, in being the leader in gathering the important professional association. Here we are in FinTech Belgium Association, profession. And the, let's say, the pure player of an ecosystem and not being necessarily reactive in terms of new usage, but in also participating in the proactive way into developing and making this, I would say, breeding ground for making this happening. So this is definitely a new alchemy of all these actors and all the different stakeholders of the ecosystem.
Well, I'm happy to hear that because if you look at Asia, for example, Japan has introduced agile lawmaking already a couple of years ago, which is something that we all admired. And what I hear you say is this is happening also here.
Yeah, definitely.
That's great.
I can confirm this.
Beautiful. Well, what about, well, looking at Europe, you're France-based, you're here in Belgium today. I presume that your business is international. We all claim we have one European market, one single market even better. But how do you deal with the differences that are coming on a national level, you as RecSharp?
Yeah, this is a very good point. Today we have, as you say, one single European framework in terms of legal, in terms of regulations, and first of all directives that have to be transposed within each local jurisdiction. And this is where our expertise can come in, because you generally have to integrate different transpositions with a compliance with the regulation, which is the same for all the jurisdictions within the EU. So this is where we have to make this kind of equilibrist work in being globally compliant and local, regional, eventually very, yes, state-oriented compliant. And this is where the expertise of RegSharp, knowing the regulator, globally, European, and local with certain, let's say, jurisdictions like Belgium, France, and making this very easily working together and speaking together.
Would that not be the technology, the part that sticks all these things together?
Yes. And this is where we have to work again in a collaborative way because Say, for example, this Web3 revolution which is happening at the moment and where the regulatory body is looking at this with the will to make participate all the new structure of intermediate expertise that you find in the ecosystem, like factories, like labs. like incubators that are part of this discussion for making Europe again as a global new open and very constructive market to get all this ecosystem evolving.
Well, it's great that you guys are here at DFS today. What were you expecting to find here?
What I'm expecting here to find is, first of all, this is for us our first meeting with the Belgian environment. So this is very important for us to go into depth. It's not only talking about this, but to meet people, to see how this ecosystem is living here and how we can—
Welcome!
Thank you very much, Koen. And how we can try to bring on our side another expertise in order to export and try to help this ecosystem to be more global.
Is that then part of your key goals and aspirations for 2024, to be active in Belgium and abroad?
Yes, right, exactly. Active in Belgium and more generally speaking over the European Union.
Okay, great. Hey, we're almost at the end of our podcast. It goes faster when you're into the regulatory regtech space. Where can people contact you?
Well, they can contact me here today. We have a stand here. We are open and we have our partner ComplyAdvantage with whom we are working in combination in terms of responding to the ecosystem needs. And also in France, in regtech.com. So, sorry, regsharp.com. We are RegTech and we will definitely be very happy to, well, first explain and try to see how we can fit and how we can, let's say, have opt-in facilities to the European single market.
Excellent. Frank, thank you very much for having you.
Thank you, Koen.
Thank you also to the audience, and please stay tuned. Thank you very much.
Thanks for listening to another episode of The Connector Podcast. To connect and keep up to date with all the latest, head over to www.jointheconnector.com or hit subscribe via your podcast streaming platform.
