#36 – RegTalks with Ronald Daliya, Intelleqt Consulting

Transcript

Welcome to Reg Talks, the podcast dedicated to the latest trends from the world of RegTech, fintech, and financial regulations.

My name is Claus Christensen, and I’m the CEO and Co-founder of award winning RegTech provider Know Your Customer.

Today, it’s my great pleasure to welcome Ronald Daliya as my guest. Ronald is a seasoned risk, regulatory, and compliance transformation specialist with over twenty years of experience across Australia, Europe, and the US. He helps clients identify appropriate, sustainable, commercial, and compliance solutions through specialised reviews, advisory services, and the establishment of tailored projects.

Ronald’s company, Intellect Consulting, focuses on financial crime transformation, and he collaborates with leading regtech and fintech providers to develop innovative products, services, and solutions.

His diverse industry experience spans fintech start ups, scale ups, legal, wealth management, retail banking, and institutional banking. In addition to his client work, Ronald provides mentorship to early stage start ups and individuals, bearing his deep knowledge of financial crime project management and change management practices.

His LinkedIn account is a must follow if you’re interested in our space. Ronald, thanks so much for joining us today for our RegTalks episode.

Thanks for having me. Excited to be here and talk to you.

Great.

I love that background of yours. This is incredibly diverse and has so many elements to it. I think this is quite interesting. But tell me a bit more about your background and how you came to focus on financial crime transformation.

So I a long time ago, I started out engineering, and that took me into technology.

And then that took me into banking, and I started there in technology.

Found myself not to be a great developer, but greater managing projects.

And that took me from place to place, primarily all about sort of investment banking technology, and eventually ended up in Australia. I followed my other half over here, and nobody wanted to do the regulatory products. So I ended up doing them, and then the next one I’m doing is FinCron. And, you know, that maybe is accidental, but I wanted to have a look. And it’s proven to be a a great gamble and love working in this space.

Yeah.

I love enough encounter fellow tech person in the space. We probably had similar learning experience when entering the compliance space from our angle. In the beginning, we feel it’s all about creating a tool or app, and then we learn the intricacies of getting that code to work inside financial institutions, and the process is accepted by regulators and so on, or even selling to a complex and very large entity like a tier one bank in the first place. I also followed my better half to a foreign country, not quite as far, just from Germany to Ireland. But, actually, we met in Asia and returned to Asia a lot, and we started KYC actually in Hong Kong later on. So it’s a kind of similar background in terms of different areas of the world.

To be a bit more precise, when you work with regulated institutions, what’s your process with them? How does that typically look like?

So it varies according to what the engagement is likely to be, but broadly speaking. A lot of these institutions are very much interested in three things that always come up in every conversation we talk about. And the first one is, what does good look like? What is everybody else doing?

And then finally, where do I start? At least one of those questions comes up. And all these regulated institutions are wanting to know that they’re not overcooking or undercooking what they want to set out to change or do or work with. And that’s a big deal for these guys.

Some turn around and say, look. Just because x is doing this doesn’t mean we have to follow that and whatnot. They are hundred percent interested in finding out what other people do. What are they up to? I think from these perspectives, it’s really important when you start up and you’re gonna get some credibility around what we’re talking about.

I find that it’s really important to share what works and what doesn’t work. I like to have those conversations quite quickly. And from the back end up, we find that quite a successful approach, actually getting people on-site and understanding what we’re about, and we actually can help them benefit.

From what we started out with, and I learned this in in our own practice as well, that only a very small part of changing something is actually the product or the tool or the process, and a lot revolves around the management of that change in an institution. So change management is such a big topic. We’ve had that many, many times as a challenge in our own company, KYC, and it was steep learning curve. What are the key strategies and the best practices you would recommend for driving successful organisational change with this or inside these initiatives?

So I think look. There are probably two parts. The first part is before you’ve even made a sale, there needs to be some really good concerted effort to look internally.

What is it you’re setting out?

How is it going to be managed? What are the business impacts likely to be?

Do you need uplifting capability?

Is tech impacted? Is the organisational structure need change?

Is the business inputs and outputs supply chain? And your customer, are they be affected or impacted in some shape or form?

With understanding that means you’re going to that whole project cycle, life cycle, understanding, our eyes open, better understanding what’s going. A really good stumbling block of reg text is getting through that governance and bringing a solution into an organisation as a whole due diligence approach, regulator sign off, data in the cloud, all these sort of things you’ve gotta cover off before you even bring, you know, even a small solution into the organization. And sometimes that can be a real killer if not managed. So one of the strategies is after you’ve get got through that sort of initial, I understand what the impacts are, then it’s about working that end to end view. Right? You’re affecting a part by change into probably maybe a whole value chain or part of the value chain.

And your success is absolutely driven about knowing where you are in that value chain and what are the impacts upstream and downstream within that.

And if you understand that and where you fit in with that and you can help orchestrate or glue those parts together, that’s it’s much better.

RegTechs really find this a challenge because you’re only really coming along with some parts of that answer, and you need someone on the ground who can really help you glue all those things in. Capability uplift, healing up the people. And it’s not just around using the process and actually having the skills to understand what an alert does and how they’re gonna triage the alert. And if that alert’s genuine, what is the searching? What is the OSINT search you’ve gotta do? What is the background? Are you gonna qualify that triage?

Those capabilities aren’t something you just hand over in two minutes.

So, you know, they require a lot more of that change management view. So before and after, really important.

Mhmm. I found navigating the many stakeholders in every project a special difficulty in our world. In the startup world, generally, we are used to flat hierarchies and quick decisions, and that’s not an easy match in general to the world of tier one banking. But if I think about it, what is your output actually to these institutions?

Is it in the end a written process document by which change is introduced, or how does that work?

It varies. So I’m sometimes engaged to provide a project, an end to end project. I’ll manage the project from business case or liquidity closure. I may be asked to come along and provide a strategy.

I may look at it from a portfolio perspective and say, here’s a hundred and twenty things we have. How do we make sense of this?

We sequence them up. What’s the strategy? What are the strategic ones versus the practical items in there? How do I layer these things up? What about some analysis? Do you want me to focus on part of that value chain that we took previously or the end to end view? Is it a capability analysis?

I’m different from a lot of my peers in the industry, and I have a transformation background.

So I see everything as a journey from a to b, and therefore, a transformation.

So from a client’s perspective, it’s really around saying, what are these opportunities? What are these obligations I need to meet? I’m saying you can’t just implement them in isolation. You can’t make a recommendation saying you must uplift, include additional monitoring. It’s just not for that. Need a lot more of the soft aspects because of the change management and how you transform that step into something that’s actionable and you can do something with.

I have learned that to a degree now, but hearing you talk, I get even more complexities in the change management than even we see normally from our vendor kind of standpoint. We are often the target by change management specialists inside inside the the institutions looking at us and then asking us questions that lead us to, oh, yes. How this will this process really be transformed by introducing our technology?

What do you think are the most difficult challenges that technology companies face when interacting with also your customers? What do we do wrong?

Oh, it’s hard. I mean, projects are hard. Projects are easy. Everybody would get to do them and do them successfully.

So yeah.

They’re difficult. It’s difficult for a third party to commit, fully embed within the client’s environment and really understand, as you mentioned, stakeholder engagement, who does what nuances within meetings. The more complex you get, the more impact from your change.

You have political agendas with different teams, and you’ve got inter process handoffs between different teams, people who may have seen or had more experience in this implementation through our jaded or naturally within a in a large complex tier one base. We’ve got very specialised functions.

And, therefore, as soon as you span that value chain, now you’re going across business division areas as well.

This division, not the right word, but division is quite important because they are operating under different drivers and different motivators as a concept. So it’s really difficult to navigate, but, you know, the success is really having someone on the ground who can actually help you navigate, you know, embed within where you get a third party in, a partner, you have someone dedicated within your team who can basically lives and breathes the environment, helps glue this all together.

I think that’s the real real way to do it because you do need to facilitate.

How am I going to hand this process under the fence between these two groups?

What’s the handover look like? You know, who is accountable, responsible from that? Process can play a really big part of this as well. A lot of people aren’t always clear as to what’s expected of them, especially later on when they’re handling the shiny thing and not being made very clear.

It’s not just the shiny thing, but all the support that goes around it too. And then what happens if you have to change it later on? Who are you gonna call?

In many projects, I wish we had that person on the other side, and we usually don’t. I think what I get from is one of the biggest challenges is the failure of vendors to even understand that that challenge. We think of introducing our products and services in terms of the user that uses it and maybe their supervisor that looks at them from a higher point, reporting, and so on. But that doesn’t quite capture the complexity of change management at all because there’s so many more layers to it.

There’s so many more decisions to be made and the future long term viability to look at and so on. The failure of seeing that from the beginning and not having someone internally who facilitates that, I think, is one of the biggest challenges and causes the most, train wrecks in in the industry of projects abandoned or delayed or much more expensive and so on. Yeah. I I get that.

When I read your bio, I thought, well, this is very interesting with different cultures as well. You have worked in many different cultures. Do you see any interesting differences in the work environments in our space of financial crime and financial compliance between the US, Europe, and Australia?

Look.

Most of my compliance activities and work are really affected in this country than anywhere else. But I’ve been involved in all sorts of compliance function. I would say in Australia, the reg tech community and the guidance that we have around and that regulator is x. I’ve looked at other sort of jurisdictions as well, and it is really quite fulsome.

They’re quite good at putting out really sort of applicable and make sense.

Industry consultation always can be improved. In terms of cultures, which is I think the interesting part is the most aggressive I’ve seen in the time is really out of the UK.

I thought it would be more aggressive in the States, but it wasn’t.

Again, get it in mostly right and then fix it, and there’s an appetite to actually work in that way. In Europe, it was more about around committee getting it as wide as possible, but dates could move.

In Australia, again, wanting to actually get it closer to better, and dates can move as well depending on your activity. But, fundamentally, it was much more sort of relaxed in this culture and as to how affecting that. I think it does depend on the institution and what their cultural view is internally, but it’s the one I I thought was the biggest surprise was in the US. Right? I thought it’d be much more aggressive.

Well, sometimes you can be more relaxed if you already have a big market share and that that that makes for a different culture maybe.

What I found interesting is the diversity that I encountered in our counterparties in Hong Kong and Singapore and Asia, specifically.

We did a lot of deals in in Europe as well, and that’s a bit more uniform. But Singapore and Hong Kong are such diverse places. You would encounter Frenchmen and Indians and people from all over the world, Americans, a lot of all, and and, people from the UK. And that makes for a diverse experience in itself. We never know who who’s sitting across us, who’s looking at our solution, and how they will react.

But on the other side, our own company is built like that as well. We built it remote first from the very beginning. That meant we had access to a lot of, talent worldwide.

We have now, I think, staff from seventeen countries in in our company, which makes for an interesting experience internally or already and probably got us all to be very, very flexible there and accepting, and that works for me very well. Yeah. Apart from that, I would say the only cultural thing that I definitely saw was that in Asia, people are more adept at negotiations.

Like, we come to the table with negotiations one zero one knowledge, and they have a completely different level to get the price down.

Is it more aggressive then?

I wouldn’t say more aggressive.

It’s more sophisticated in negotiations.

They know what they want, and they usually have a path to that.

Once we come to a negotiation where more with an open mindset and reactive idea, and that’s not so smart in Asia.

Right.

But fair enough. Yeah. I have two more questions. One would be, you’re working with such a diverse set of clients, start ups and scale ups, smaller ones and fintechs and established institutions. Do you have any favorite client segments, and what surprised you when you worked with them?

I do like the fintechs. Fintechs are great. In the consulting we provide, everything’s actually more practical. We’ll provide a rationale of why we need a correct recommendation. And then we even talk about how you can basically we do a review of your program.

We’ll even sort of sequence some of those recommendations so they can make the best of it. These guys are really interested in how they can affect those apps. They do that quickly, efficiently. There’s a change to how driver’s license is scanned, and they’re implementing that within two to three days.

And the the ability to actually take what you’ve said on board, ask the right questions, knowing that they haven’t got any of these internal challenges around risk friction or change and so forth. It’s quite refreshing, and it just gives you the idea that you can make a difference. You know? And we’re coming to help these sort of businesses.

They really sit up, pay attention. We wanna get value out of you because, you know, they don’t you know, not always maybe interacting with consultants and so forth. So they wanna get value out of you, make sure it’s the right thing, and they wanna make sure that does this work for our business? You you can’t come along with a school.

It’s black and white compliance.

It’s gray. It’s commercial.

It’s where’s the tension sit for that? You know? You have to have that thinking in your responses.

I think there’s a very interesting split with fintechs who have got founders who have risk background versus those who do not.

And you find that the guys who understand risk in very early stage build more seniority around their risk people than they do with others that have more of a commercial element to that. You see the the those companies develop in different ways as well. Doesn’t mean they’re all alright. It’s an interesting observation.

We love working with fintechs as well. We have quite a few payment customers in in that space, so that is an interesting fintech space. We love them because we are fast and react fast, but, actually, selling to them isn’t that easy either as a vendor because they are tech, so they want to build their own tech. And, usually, the sales cycle is similar length as the traditional banking.

Not because they don’t decide faster, they do, but they first try to build it themselves. And then they come back to us when they found out how hard it really is, how complex a product we already have at the market, and that’s definitely the easier way buying it in at that point. But some of them make that mistake and do the extra round, and then it takes the same time. Yeah.

I think the commoditisation of, you know, solutions that people are starting to realise that that’s not something that’s developed in two minutes.

It’s both a commoditisation in terms of certain solutions are getting more standardised, and you can choose any of them.

And it is a development of greater debt in other solutions where it gets much, much further, for example, in in terms of automation or, in our case, in terms of global coverage.

That is just something yes. If you look at one specific jurisdiction, finish fast, you can do build it yourself and so on. But if you want the coverage, then it gets really, really complex very quickly. And that’s when you wanna buy in, and it’s not a commodity so much anymore until everybody’s using it, which I’m looking forward to.

Yes. Of course.

In any case, I have one more question that I ask everybody. If you were to switch roles and become suddenly the global regulator tomorrow, would there be anything you would want to change in terms of regulations?

Great question.

I’ll take the guesswork out.

You take every single transaction that any financial institution or reporting entity would create, and you wouldn’t differentiate between business and not. You take them all. And then you would make sense as a right to know what is actually suspicious and not. No different from the stock exchange. You know, they take all the trades that come in off book transfers, take all those trade reports, and then they do their analysis within that. And you got a holistic, big picture view, and it’s not part of it or what you reckon is suspicious of it. But they’re taking all of those things.

And there’s a couple of enablers such as centralised digitised ID or jurisdiction, all which enable these things. That’s what they would change.

Absolutely understand that. That would give you a fantastic view, and you would be able to find much more financial crime that way. I’m I’m sure obviously, the problem with it is privacy implications and the potential abuse in one central segment there in in the government, but the opportunity would be huge. Yeah.

Maybe you could make it more secure by anonymising it and only deanonymising instances when there is crime detected. That sort of thing could could maybe work. Yeah. Interesting interesting idea and certainly a first here on the RagTalks podcast.

Just remember when you commoditise that and make yourself famous in that technology.

There is certainly a subtech, a supervisory technology opportunity here. I have, like, the right start building.

Thanks so much. It has been really interesting. I knew I would get a different view on change management yet again when talking to you a lot. But, again, that has been thought provoking for me, and I’ll introduce more elements of that in our company as well. And, yeah, would love to work with you as well in that professional capacity in the future.

Sure. Would love to do that. I just wanna stay on the change management. Whilst it sounds complex, I talk about this in my past. There’s probably five dimensions that you’re really thinking about when you think about change impact. And you stick to those five dimensions, and you carve it up and you use that in your front of mind step view all the time, then things become more tangible and more bite sized.

What are those dimensions?

If you call my call my bluff, so I touched on them before. Business inputs and outputs, technology, organization, process, and then finally, people or, I would say, knowledge capability.

If you remember the acronym, it’s BTOP. Business, BTOP, outputs, technology, organization, process, people. BTOP.

You know, I think it’s the same in every profession. There comes a person who says, look. It’s actually quite simple.

And that means that person understood their trade. And for them, it is simple. For you, this is simple. I am sure it is still very, very complex for a lot of listeners and for the institutions, and that’s exactly the value you provide.

I would say the same thing about our stuff. It’s actually simple. We straightforward what we do. Right?

But if you go into the details, that gets complicated, and that’s where the expertise shines for and the experience with many clients, and and that’s where we provide value.

Well, the, like, value bomb at the very end of the podcast. Thank you so much again.

Thank you for listening to this episode of Reg Talks. My name is Claus Christensen, and I’m the CEO and co-founder of award winning regtech provider, Know Your Customer.

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