The idea that RegTech will be a driver of progress across the industry has already started to spread among asset managers, their service providers and regulators, and we believe that it will continue to rise quickly in 2017.

Year after year, the asset management industry is met with new rounds of regulatory requirements that promise to put new strains on industry operating models. Though firms have certainly made some headway in improving their approaches to data management, they still struggle to leverage automation to improve back-office processes, despite a long-standing desire to do so.

While challenges in the back office will certainly persist, the collective buy-in to the concept of RegTech will expedite user adoption among asset managers and their service providers as the industry seeks to open the door for full-scale automation.

At this same time last year, I wrote that data availability and reusability were essential for helping firms to proof their systems against new demands from regulators and clients alike.

Now, it has become clear that new disruptive RegTech solutions have the power to do just that. In a recent blog post, our regulatory and compliance market analyst, Nicola Le Brocq, wrote that by leveraging RegTech solutions and their core benefits—data centricity, speed and agility—regulatory compliance can be transformed. Indeed, over the past few months, I have seen firms beginning to view RegTech as a way to reduce reporting timeframes well below regulatory-mandated deadlines, and not just to meet a minimum threshold. It seems many organizations have started to view this as a way to streamline business and improve their overall operating models.

There have been very few concepts introduced by regulators that have sparked the imagination and aspirations of the industry like RegTech.

That is very much a function of the pressure that regulatory regimes have placed on the asset management back office over the last several years, but it also is an indication that the industry is motivated and ready to transform the back office to the same extent that the front office was transformed a decade ago.

At Confluence, we strongly believe that the adoption of RegTech and the promise of efficiency that it brings is just the beginning of an industry-wide journey to revolutionize how it does business. Firms that actively embrace this shift will position themselves for long-term growth and success. Those that do not will risk being increasingly marginalized as changing investor expectations render old models of doing business obsolete.

Firms are hungry for change and RegTech solutions that can deliver that change will be sought after in 2017.