An increasing regulatory information inflow, the pressure to cut costs in the process of compliance, and to achieve a greater level of safety have given rise to a new thrust into innovations. It is to bring technology solutions to transform the way regulatory compliance is achieved and managed, the kind of reports and insights into risk and control can be possible. Broadly speaking, RegTech pertains to the solutions into regulatory compliance, risk management, fraud prevention and reporting across industry verticals using technologies like Cloud Computing, Machine Learning, Internet of Things (IoT), and Analytics to name a few.
Even though RegTech has been envisaged to offer solutions in different sectors of industry, it is the financial sector that needs it the most. The domain of technology management in financial services have undergone disruptive changes due to online payments, blockchain, biometrics and enhanced surveillance techniques. While new processes for transactions, monitoring and control have emerged, the associated risks and their management have become more important today.
The possibility of accessing data anywhere has been possible with Cloud Computing and proliferation of mobile computing. The capability of stitching disparate systems together for common goals while retaining the security of each system intact, has been possible with Microservices-based software applications. Machine learning has enabled us to classify and get insights into the large set of information. It has helped us build models for forecasting and prevention of risks and reinforce compliance in business processes.
RegTech includes areas like content and data management, modelling and analytics on regulations, risk management and fraud prevention. In financial services, different areas like retail banking, financing, insurance, blockchain, wealth and asset management have using RegTech in a big way. In fact, there are many startups today building and providing solutions at different levels of the value chain.