WHAT IS REGTECH?

Regulation Technology (RegTech) encompasses any technological innovation that helps improve efficiency and transparency in regulation. It encompasses 4 Key Characteristics: Speed, Agility, Analytics & Integration. 

Often regarded as a subcategory of FinTech, RegTech places increased emphasis on regulatory monitoring, reporting and compliance, making it ideal for the Financial Sector. However, despite its primary application in the Financial Industry, RegTech is quickly expanding across market sectors as an ever increasing number of firms begin to realise its merits in achieving and exceeding government mandated compliance standards.

SPEED

Reports can be configured and generated quickly with no loss of quality

AGILITY

Cluttered and intertwined data sets can be organised through ETL (Extract, Transform, Load) Technology 

INTEGRATION
ANALYTICS

It offers short
timeframes to get the
solution up and
running

Analytic tools intelligently mine existing "big data" data sets and unlock their true potential 

DECREASE COSTS

Drving down the cost of compliance through simplification and standardisation of processes 

LINK CONTROLS AND FRAMEWORKS

THE REGTECH PROMISE

SUSTAINABLE & SCALABLE SOLUTIONS

IDENTIFY

RISKS & ISSUES

Assist firms to identify risks and issues through scenario analytics and horizon scanning for new regulations

Allow controls and risk framework to be linked seamlessly as RegTech solutions work with

enterprise-wide governance and risk platforms

A BRIEF HISTORY OF REGULATION

Financial Institutions

Develop RegTech

strategy and 

roadmap and adopt solutions

THE ECOSYSTEM 

RegTech Firms
Understanding of engagement between business and regulators to help develop solutions

Regulators
Encourage dialogue and gather market views to promote innovation and create common 

standards

Professional Services
Responsible for understanding the requirements and solutions in the ecosystem 

Utilise solutions to allow flexibility and growth to move away from rigid risk management systems

BANKS ON COMPLIANCE COSTS 

Fined $41 m by the Securities and Exchange Commission for insufficient monitoring for AML in 2017 and in 2016, fined $7.2bn by U.S. Department of Justice 

Spending on regulatory programmes and compliance rose 12% to $800m in the first three months of 2017 

Securities division fined $16.5 million for AML faults in 2016 

Fined $8.9 bn for violations in transaction sanctions in 2014

Fined $34.5m for failing to report details of trading in exchange traded derivatives 

COMPLIANCE IN NUMBERS

 

$80 billion is currently spent on governance, compliance and risk, with the market expected to grow to $120 billion within five years.

Between 2009 and 2015, the fines and settlements amounted to $204 billion

On average, financial institutions have 15% of their staff dedicated to compliance

Compliance costs represented 3% of total expenses for banks with assets between $1-10 billion and 9% for banks with less than $100 million.  

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