THE BURGEONING INFLUENCE OF REGTECH
In this era of increasing scrutiny, RegTech is removing the pain points in customer onboarding and helping firms meet their anti-money laundering (AML), know your customer (KYC) and regulatory reporting requirements. It is assisting with transaction monitoring, risk and compliance management, identity and control management, and regulatory intelligence, among others.
“RegTech solutions allow for better regulatory reporting and improved analysis of market abuse, where vast numbers of trades take place and humans simply do not have the bandwidth to spot trends and strategies of sophisticated market operators,” says Nigel Brahams, a partner at Collyer Bristow. “The adaptability of RegTech has proved particularly useful for banks in areas such as payments, e-trading and fraud prevention.”
Thanks to the appeal of these applications, the size of the global RegTech market is expected to reach $55.28bn by 2025, according to Grand View Research, expanding at a compound annual growth rate of 52.8 percent over the forecast period.
However, it has taken some time for the financial services industry to fully embrace the new technology. “Until recently, many financial institutions (FIs) failed to see the benefits of applying RegTech, but it is indeed happening now,” says Evgeny Likhoded, chief executive and founder of ClauseMatch. “The fear of being fined, a lack of sustainability, throwing people at the problem and personal senior managers’ accountability have certainly been driving factors behind the increased acceptance of RegTech. These fears have increased the need for organisations in financial services to move more quickly and to be nimbler, innovate faster and adapt to new challenges.
Jul-Sep 2020 Issue
Richard Summerfield