Customers, entrepreneurs and financial institutions have all felt the impact of FinTech over the last several years. In fact, it’s banks are expected to invest more than $20 billion on technologies by 2017. RegTech is one of the more recent technologies involved in the FinTech revolution.
In this article, we’re going to define RegTech, share its origins and explore how it’s going to impact and benefit both customers and businesses.
What is RegTech?
The Financial Conduct Authority (FCA), a regulatory body in the United Kingdom, describes RegTech as the “adoption of new technologies to facilitate the delivery of regulatory requirements.”
“I would define it as technological advancement that assists those focused on compliance and regulatory-related activities in their professions,” Kari Larsen, counsel at Reed Smith LLP in New York, and formerly in the Enforcement Division of the Commodity Futures Trading Commission, tells Bloomberg BNA. “So making it easier, swifter, more complete, more efficient to monitor compliance and regulatory obligations.”
Alan Meaney (CEO of FundRecs) further explains in a Deloitte report that “Like FinTech, PayTech and many other combinations of XXXTech, RegTech is another example of an industry that is being changed rapidly by software. There has been technology used at various levels in the Regulatory space for over 20 years. However, what the new RegTech label recognises is that the gap between software and non-software enabled services has widened significantly.”
Javier Sebastián, BBVA Research’s expert in digital regulation, adds that companies who are “harnessing the capabilities enabled by new technologies such as cloud computing, big data and blockchain, are devising solutions to help companies across all sectors of activity ensure that they comply with regulatory requirements. In the financial sector, RegTech is deemed a subarea of what is generically known as FinTech.”
Despite the fact that technology has been used to address regulatory requirements, RegTech, according to Deloitte, is an exciting development that contains the following characteristics:
- Agility — Cluttered and intertwined data sets can be de-coupled and organised through ETL (Extract, Transfer Load)…