With increasing scrutiny (and fines) from regulators, there has never been a better time to look at the promises of RegTech. In fact, there are 3 main ways RegTech can improve the financial services industry as whole:
- RegTech can help financial institutions avoid fines and censures. Regulators around the globe have been active recently, sending out numerous “Dear CEO” letters that warn financial institutions about gaps in their approaches to compliance. Many have also levied hefty compliance-related fines for reporting failures. For financial institutions, the stakes are clearly high, and RegTech solutions are here to help.
- RegTech can help both financial institutions and regulators develop and implement new policy initiatives. In many places, bold new plans are underway to fill in found gaps, including those found in reporting infrastructures, financial crime monitoring and existing rulebooks. RegTech can help put the best and brightest to work on adapting available technological solutions to solve these issues. RegTech specialists can also be leveraged for their knowledge to help shape the path forward.
- RegTech can help financial institutions save their resources (primarily time and money) when facing the following business challenges:
- Protecting consumers and systems
- Monitoring for fraud, money laundering and other financial criminal activities
- Ensuring a sufficient infrastructure exists
- Improving market transparency
- Increasing corporate social responsibility and accountability
Although it may seem like an overwhelming task to research the wide variety of available solutions and then develop and implement solutions based on one or more of them, the good news is that leading regulators, financial suppliers and RegTechs understand that high levels of regulatory change can actually be a good thing in terms of forcing the advancement of compliance into a new era. In the end, this new era will be beneficial to all financial industry stakeholders, from regulators and financial institutions to everyday financial industry consumers. To get there however, we need to encourage a true collaborative problem-solving environment and be unafraid of making the necessary changes for the betterment of all.