You know regulations, we know tech. This is how to bring them together to make compliance better.

If you have clicked on this article then chances are that the work you do involves regulations, compliance, or policy. They’re a big deal and the market agrees — RegTech is a fast-growing part of the FinTech revolution and is making a huge difference to the daily lives of the people that deal with compliance. Priced last year at $2.3bn, the value of the RegTech market is expected to reach $7.2bn by 2023.

In this article, I’m going to tell you what RegTech is and where technology is making a difference.

What is RegTech?

Want to improve the delivery of your regulatory requirements? RegTech facilitates this process and makes it easier, faster, and more efficient to monitor your compliance and regulatory obligations. The technology is agile, customisable, easy to integrate, reliable, secure and cost-effective.

As the number of regulations and their complexity increases, harnessing new technologies like machine learning, big data, cloud computing, cryptocurrency and blockchain are essential to keep up.

Where is RegTech making a difference?

1. Costs and operational efficiencies — The automation of business processes is simplifying and standardising compliance. For example, if you automatically map regulatory risks to key business processes you reduce the need for manual checks.
2. Flexibility and scalability — With custom development you are able to add new features whenever you need to, which allows your business to grow alongside changes within the industry. You will no longer need to rely on enterprise risk management systems, which are fixed and leave almost no room for compromise.
3. Integration — The most common issue we see is IT landscapes that are a collection of enterprise-wide governance, risk management and control platforms and smaller team-wide solutions purchased off-the-shelf as a quick fix. Linking these together with technology is essential to optimise business processes, but also to ensure efficient data-capture and sharing.
4. Becoming proactive rather than reactive — Machine learning assets such as scenario analytics and horizon scanning can help you to identify areas that are likely to see new regulatory changes. If you operate across different jurisdictions, technology can help you to track local and national regulatory changes.
5. Data and analytics — We use ELT tech (extract, transfer, load) to mine and organise Big Data intelligently. Machine learning can be used to interpret unstructured data like emails or scanned documents. All of this means better data and improved analytics like risk modelling, monitoring compliance, updating policy, anti-fraud and anti-money laundering.
6. Reporting and auditing — RegTech can easily configure your data to produce real-time reports (e.g. real-time transaction monitoring to address AML and CTF regulations). With a good user experience (UX) and user interface (UI) designer, the digital experience can be tailored to the specific needs of an employee or customer.
7. Remote working — Becoming cloud-based not only helps with flexibility, so teams can collaborate from anywhere, but it also ensures software is responsive. This is both in terms of memory, processing power, and the ability to push changes and updates. This also enhances your ability as a multi-national to work across several territories.
8. Security — A robust fraud platform that uses blockchain and biometric technologies will keep financial information secure and can also be used for identity verification. Cleaner and more transparent data means proactive reporting and better auditing. In turn that will protect the financial health of your company and improve the overall integrity of the market and governance.

If you have an idea for improving your business processes with technology and want some advice, leave a comment or send me a message.