As the Financial Services market evolves over the next 12-18 months, we see an increase number of changes to regulations which in turn can present problems for businesses. Compliance Officers are becoming inundated with increased reporting requirements along with the increase in everyday compliance tasks. RegTech brings a solution that is not for the faint hearted, but could help automate some of the most burdening compliance tasks.
RegTech can help automate tasks such as, transactional monitoring to address certain elements of Anti Money Laundering (“AML”) and Counter- Terrorist Financing (“CTF”). This may also include Due Diligence requirements that need to be fulfilled or perhaps, methods like the Know You Customer (“KYC”) processes. These types of tasks can take a significant amount of time to complete and can certainly be automated by working with the right RegTech business to help with your requirements.
Institute of International Finance sums up RegTech as “the use of new technologies to solve regulatory and compliance requirements more effectively and efficiently.”
In business practices, any regulation changes are normally followed by setting up separate projects to implement those changes, in order to achieve compliance. However, this can create a multiplied effort, especially where there are cross overs for certain regulations. Firms find that they have duplicated controls and processes including, multiplied MI.
RegTech can help with these types of problems including reporting on compliance in real time.
Regtech businesses can help financial institutions to stay current with new and emerging regulations. Until RegTech emerged in the market, it has always been a challenge for firms to stay abreast of regulatory changes, especially global firms operating in several different jurisdictions. RegTech offers to track regional and country regulatory changes to keep you abreast of your compliance requirements, as well as provide the real time information of how well you are complying against each regulation to enable internal audit to ensure you complying with the most current requirement.
In 2015, the Financial Conduct Authority (“FCA”) and Prudential Regulation Authority (“PRA”) are supporting the widespread adoption of RegTech in the UK. The FCA is looking to be more engaged with RegTech companies as this market continues to grow over the next few years.
As a regulatory expert, I think this is a great time for Financial Services firms to work with start-up RegTech business to give them a platform to help firms stay abreast of regulatory changes. 90% of my clients in 2015/16 suggested that this was an area of concern to them and RegTech could just become the answer they are looking for.
RegTech 2017: Taking FinTech the Extra Mile