For those unfamiliar with the term, RegTech is the management of regulatory processes within the financial industry through technology. The Financial Service sector has seen a meteoric rise in the number of Regulatory Technology or RegTech companies in the past years. To understand the reason behind this boom, we need to acknowledge how the RegTech companies are helping the large financial institutions save millions of dollars in compliance costs among the growing list of regulatory obligations being imposed onto them.

RegTech companies help financial services firms get better at dealing with regulations and focuses on filling the current gaps in the financial sector by bringing in technology to address the regulatory challenges since many firms still operate on legacy or manual processes that are no longer feasible to address the growing list of regulatory obligations, like

  1. Regulatory compliances – Machine Learning and AI help to ensure compliance in a dynamic world where it can be very difficult to keep up with all the changes and newest rules.
  2. Identity Management and Control – Identity management and control include Know Your Customer (KYC) processes that are usually performed manually, but with the help of RegTech solutions, necessary information from multiple sources can be captured and analysed at a much quicker pace.
  3. Risk Management – RegTech solutions can help predict market changes and mitigate risks. The solutions allow detecting compliance and regulatory risks, assessing risk exposure and anticipating future threats.
  4. Regulatory Reporting – Enabling automated data distribution and regulatory reporting through big data analytics, real time reporting and cloud can bring significant time and cost savings.
  5. Transaction Monitoring – RegTech solutions offer Robotic Process Automation that can help to analyze and monitor transactions faster and more accurately than any separate department. This helps to identify potentially suspicious activities and flag illegal ones.


The RegTech Advantage

RegTech’s ability to deliver tools to reach compliance more quickly, and at a lower cost, poses a huge benefit for the financial institutions keeping in mind the growing list of regulatory obligations an organization has to comply with, and the consequences of non-compliance and large fines associated with it. Data analytics enables regulatory information to be analyzed, helping financial institutions identify risk and issues and efficiently remedy them. In addition, the implementation of RegTech Solutions integrated with automation technologies such as Artificial Learning or robotic leads, according to a KPMG Singapore report can cut costs for financial services firms by up to 75 per cent.

RegTech also ensures the possibility of optimizing production capacity, allowing human resources to be used more efficiently and perhaps for tasks with greater added value.

According to a KPMG report, by 2022, total corporate spending in the RegTech industry is expected to reach $76 billion, seven times higher than the figure than investments in 2017. This means that by 2022, expenditure on RegTech solutions will account for 34% of total corporate regulatory expenditure.


RegTech allows businesses to solve regulatory challenges saving their time and money. Given that most transactions are digital in the country, checks and balances can be put in place through breakthrough RegTech technology, with margins of error reduced drastically.