Ben Parker, CEO of eflow Global: “There’s growing concern about market abuse perpetrated as a result of AI-driven trading”

We all know the impact of AI on the tech world. Today alone, we’ve written about how Cisco is examining the likely job losses through AI and the rise of the Chief AI Officer. Yet it’s still startling to discover how big an impact AI is having and will have, on the fintech sector directly from the lips of Ben Parker, CEO of eflow Global, one of the world’s leading Regtech providers.

“There’s a growing concern about inadvertent or deliberate market abuse perpetrated as a result of algorithmic, AI-driven trading,” he told us, “which could lead to complex and potentially unpredictable market dynamics.”

This comes after eflow’s own research showed that fintech firms see AI as a “bigger risk than global economic instability and the geopolitical situation”.

But, as Ben explains, AI isn’t the only disruptive influence in the fintech world. Many startups are having to pivot away from a growth-at-all-costs strategy and focus instead “on efficiency and sustainable revenue, which is much easier said than done”. And having recently led eflow’s Series A funding round of £7 million, he knows first-hand the challenge of keeping investors happy.

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Could you please introduce yourself to our audience and share how you ended up working in fintech?

My name is Ben Parker and I’m the CEO and Co-Founder of eflow Global. Since 2004, our technology has been enabling financial institutions to meet their regulatory obligations in the most robust and efficient way possible.

In simple terms, we found that many firms had manual regulatory processes that were broken or digital compliance systems that weren’t scalable. To combat this, we built a digital operating platform that acts as the foundation of our Regtech modules and allows us to deploy new functionality and enhancements in a quick, efficient and seamless way, while still delivering digital tools that evolve and scale with each individual client.

What do you think traditional finance and banking companies can learn from disruptors in the fintech space?

One of the most significant moments in eflow’s evolution was when we realised that many firms wasted huge amounts of investment, time and resources into building their own bespoke regulatory technology.

The problem with this approach is that these systems are immediately moving towards the end of their viable shelf life as soon as they are launched (that is, go live means legacy) and will require significant investment to maintain and evolve. While I completely understand the desire to keep technology projects ‘in-house’, outsourcing certain projects and establishing partnerships with specialist vendors can often save time, money and pain in the longer term.

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In what ways is artificial intelligence impacting the fintech sector?

AI is having a huge impact. In the regulatory space, we’ve recently published research which highlighted that 57% of firms see the accelerated use of AI as the market force which is most likely to cause compliance issues in the next 12 months, meaning it’s seen as a bigger risk than global economic instability and the geopolitical situation.

It undoubtedly opens up new opportunities for firms to drive efficiencies and automate processes, but there also needs to be a sense of caution. For example, there’s a growing concern about inadvertent or deliberate market abuse perpetrated as a result of algorithmic, AI-driven trading, which could lead to complex and potentially unpredictable market dynamics.

It’s also interesting to note that regulators are also turning to AI in a bid to combat this type of market abuse. There’s no doubt that AI will continue to have a significant impact on the fintech sector, and the wider world of financial services, for the foreseeable future.

How does your company differ from its direct competitors in the fintech space?

Broadly speaking, you tend to see two types of regulatory technology companies. Those that build bespoke solutions that are completely personalised to a client’s needs but require significant investment and time to deploy, or off-the-shelf software that is cheap and easy to implement but takes a ‘one size fits all’ approach.

Both have pros and cons, but eflow has deliberately taken a different approach. Our PATH ecosystem is a standardised digital infrastructure of shared services that underpins all of our products. This means that each of our Regtech modules can be deployed and upgraded quickly, but also offers our firms the personalisation that typically is only available with a bespoke build.

As a result, our clients get the best of both worlds, without any compromises.

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What are some of the biggest challenges the fintech sector is experiencing as a whole?  

After the massive investment into the sector that we’ve seen over the last five years, there has undoubtedly been a significant slowdown in the last 18 months or so.

A lot of firms raised significant capital at huge valuations and adopted a ‘growth at any cost’ approach. They are now under huge pressure to pivot away from this strategy and focus on efficiency and sustainable revenue, which is much easier said than done.

Having gone through our own Series A fundraising in 2023, we were very clear with our investors that we are operating with ambitious but achievable growth plans, grounded in the capital-efficient/bootstrapped ethos we have had for most of our existence.

I think that delivering a long-term strategy that remains unchanged is much more realistic than having to run a business where the goalposts are continuously shifting.

What advice do you have for aspiring professionals wanting to work in fintech?

While I think it’s always helpful for young professionals to have a career plan, fintechs in the start-up and scale-up process undoubtedly demand flexibility from their people. With this in mind, I would advise anyone at the start of their fintech career to ensure that they don’t limit their opportunities by saying “I only want to be a…” – being agile and willing to utilise your skills in different ways is a hugely valuable asset.

Many members of our team are now in roles that are quite different to the ones in which they started their eflow career, and their experience across different parts of our business is undoubtedly a strength.

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