The next in our blog series, 'Tech Me Out', aimed at demystifying and explaining some of the technologies and technical terms we encounter and use every day in the b2b tech PR world.What is the technology?
Reg Tech is the application of emerging tech to help firms better manage regulatory compliance in the financial sector. RegTech providers seek to offer integrated stack solutions, unique to each business, to help firms navigate the ever-changing regulatory environment more easily.
What does it do?
RegTech companies collaborate with financial institutions and regulatory bodies using cloud computing to share data between the two. The data collected from the financial firm is drawn up into a generic report and assessed against compliance regulations to predict potential risk areas. With the use of tools such as AI and Machine Learning, this data is filtered through to build a profile of an institution or individual to verify their identity. From here, any identifiable threats or suspicious activity is then relayed to the financial firm, helping them to minimize the risks and costs associated with non-compliance early on.
Why should I care about it?
As financial institutions find themselves faced with a constantly evolving regulatory environment, the risk of accumulating bills for non-compliance grows bigger each year. RegTech seeks to ease this pressure on financial firms by better managing their compliance measures to avoid costly fines – saving firms time and money. In fact, it is estimated that spending on RegTech will exceed $127 billion by 2024, up from $25 billion in 2019 (Juniper Research). Even more so, as Brexit appears to be an impending uncertainty for the future of financial regulations RegTech will become the most sought out commodity to have in your back pocket to help your financial firm stay up to date with compliance regulations.
Who is talking about it?
Given the growing interest in RegTech solutions, Deloitte has labelled the platform as “the new fintech”. According to International Banker, the global compliance spent by banks reaches more than $270 billion each year as companies race to prevent the sting of costly penalties and fines. RegTech solutions now look more promising than ever to the financial industry, with big banks such as HSBC investing in their own RegTech provider.
If you are struggling with any technical jargon or want a simple explanation for that complex tech you are working on, let us know and we will simplify it for you!