Do you find yourself wondering what on earth people are talking about when they mention regtech? Then this article is for you. With many firms becoming increasingly reliant on technology, regtech continues to become more and more necessary. Read on to learn about regtech, its applications, history, and why it’s important for business and employee efficiency.
What is Regtech?
According to Koombea, a digital product development company, the definition of regtech covers the technology solutions business and regulators use to ensure regulatory compliance is observed. These tech solutions are also designed to increase efficiency and reduce compliance costs. Regtech is closely associated with FinTech, however, it has found use in various sectors that deal with compliance and regulation difficulties. These include healthcare, government, tech, cyber security, and more, along with the financial industry that regtech was originally developed for.
Regulations are being introduced rapidly and the fines for non-compliance are constantly increasing. Regtech makes use of technologies like artificial intelligence, machine learning, blockchain technology, and natural language processing to revolutionize compliance processes. These technologies allow businesses to stay ahead of increasing compliance costs, thereby saving money in the long term. This makes regrech increasingly more important each year.
Regtech falls into 3 categories:
Regulatory Monitoring: Regulatory monitoring tools serve to collect regulatory compliance information and consolidate it all in one place, making it easier for compliance teams to keep up with the latest regulations. This information is found in the form of documents containing laws, guidance, rule updates, and enforcement actions.
Regulatory Obligations: These tools go one step further by scanning these documents and giving you actions that you should take in order to be compliant. This takes the guesswork out of the process, offering businesses a more convenient and efficient way of staying compliant.
Compliance Management: Regtech compliance solutions are growing in sophistication. Nowadays, these solutions not only provide you with options to become compliant but also store all information regarding regulation in your industry so that you can manage your compliance easily. These tools are like a CRM that is focused solely on regulatory compliance. They are most useful for organizations with multiple departments, such as healthcare, government work, and financial services.
These tools are the most advanced of the 4 categories and utilize technology such as AI and machine learning. They help organizations to complete tasks in a way that is compliant with regulations by using task automation in tandem with compliance control and obligation assessment.
The Benefits of Regtech
Now that you understand what regtech does, it should be quite clear why it’s so beneficial to companies in various industries. The major benefits of adopting regtech solutions boil down to accuracy, efficiency, risk management, and internal alignment – ensuring that internal teams and processes are working together.
While regtech is not a particularly new industry (having started in 2008), it has grown rapidly in recent years and will continue to become an essential tool for businesses. Learning about how it works will help you to make the right decisions for your business, putting you on the road to ultimate efficiency.