What is RegTech?
RegTech (short for Regulation Technology) has become a prerequisite for organizations to remain compliant. Due to the ever increasing complexity of rules and regulations, organizations have to spend more and more time on compliance. In fact, increasing levels of regulatory expectations consistently slow down businesses, which need to focus more and more on remaining compliant. RegTech, the use of technology to solve regulatory and compliance requirements, can strongly help managers in efficiently achieve their compliance objective while reducing risks.
What are the benefits of RegTech?
RegTech can truly be beneficial to firms and managers seeking to quickly and simply take care of regulatory and compliance activities. According to a report from Deloitte, “the 4 main characteristics of RegTech are:
- Agility: Data sets are more easily organized through technology.
- Speed: Reports can be generated much quicker.
- Integration: Short timeframes to get solutions up and running.
- Analytics: RegTech uses analytic tools to intelligently mine existing “big data” data sets and unlock their true potential e.g. using the same data for multiple purposes.”
These and other characteristics allow RegTech to bring extra value to compliance and regulation compared to traditional regulatory activities. In the Deloitte report, Kent Mackenzie (Deloitte Director, Edinburgh) suggests that RegTech can “bring clarity and efficiency into the way in which regulation is interpreted, how compliance is managed and most of all how reporting is and will be automated”
Another particularity of RegTech solutions is the fact that most are cloud-based. This means that the information is easy to access and share throughout a business, safely secured when sent or stored, and simple to modify if needed. Additionally, the use of the cloud allows RegTech firms to propose their services at lower costs, giving the ability to smaller firms to use them, which was not possible previously due to high service prices.
“Deloitte” is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, tax, and related services to select clients.
The report “Is RegTech the new FinTech?” explores how firms can benefit from regulatory technology and how they can leverage data to better understand and manage their compliance risks.
For more information about Deloitte, click here.