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.
Reports can be configured and generated quickly with no loss of quality
Cluttered and intertwined data sets can be organised through ETL (Extract, Transform, Load) Technology
It offers short
timeframes to get the
solution up and
Analytic tools intelligently mine existing "big data" data sets and unlock their true potential
Drving down the cost of compliance through simplification and standardisation of processes
LINK CONTROLS AND FRAMEWORKS
THE REGTECH PROMISE
SUSTAINABLE & SCALABLE SOLUTIONS
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
roadmap and adopt solutions
Understanding of engagement between business and regulators to help develop solutions
Encourage dialogue and gather market views to promote innovation and create common
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.