What is Reg-Tech?
Date: June 2, 2021
RegTech is technology that improves regulatory processes, specifically focusing on regulatory monitoring, reporting and compliance. In essence, where Fintech is the merging of finance and technology, RegTech is the merging of regulation and technology.
Seen as a subcategory of Fintech, RegTech tackles problems that arise from a technologically driven economy. With the digitization of finances and the increase in digital products, come issues like data breaches, cyber hacks and money laundering. These are some of the issues that RegTech tackles using cloud computing technology. Reporting standards and transparency are of high importance in these times and RegTech ensures the industry is monitored.
After the 2008 recession financial institutions faced stricter legislation meaning that data that needs to be passed on to regulatory agencies increased exponentially to the point where it was difficult for humans to monitor manually. RegTech solved this using predictive analytics and machine learning in order to scan anomalies, trends and illegal activity which saves financial institutions time and money.