Millennium Affine

Regulatory Technology Advice | Deployment | Development | Optimisation


Is RegTech The New FinTech

By Sam Keet - 25th April 2017

Regtech differentiates itself from other forms of technology by its agility. Regtech is able to use advanced technologies to extract, transfer and load data sets which are cluttered to create consumable data. This is done efficiently, which gives businesses the ability to solve real-world problems and stay ahead of the competition.

Regtech also offers financial institutions the opportunity to introduce new capabilities designed to leverage existing systems and data to produce up to date information, in a flexible, timely and cost-effective way. The advances which have been made have allowed companies to transform regulatory practices. Some technologies which enable innovations in regulatory compliances are machine learning, big data analytics and cloud computing. Machine learning is based on the increasing volume of data analysed for various compliances. This allows systems which use machine learning to become indispensable for the regulatory success of companies. Big data analytics uses analytic tools to search through existing data and unlock its true potential. For example, using the same data for multiple purposes. Finally, cloud computing offers the agility to successfully respond to changing processes and deliver cost effective applications and efficient modelling of new regulatory demands, with technology that can be easily upgraded.

Banks are expected to invest more than 20 billion dollars in 2017 and the regulatory challenge will receive a significant amount of it. In the past few years, the market has seen the volume of investments in Fintech companies increase dramatically from 3 billion dollars 40 billion dollars in 2015. Fintech is everywhere these days, and has completely disrupted all financial service industries involved with wealth management, payments, insurance as well as customer service. The global demand for regulatory, compliance, and governance software is expected to reach to reach 118.7 billion dollars by 2020, which represents a huge opportunity for Regtech.

Regtech will certainly continue to build and this growth will come from new technologies being built to serve the specific needs of regulated firms within and outside the financial service industry. Companies that develop and commercialise Regtech solutions will continue to mature their products, by incorporating previously learnt lessons to make their products more efficient and user friendly. There will be a higher level of collaboration between next generation technology providers, and financial service institutions, supporting enhanced innovation, which will result in huge amounts of growth within the foreseeable future.