Definition of Regulatory Technologies

237

RegTech is a technology that allows firms to easily adapt to the pressure of increasing regulatory requirements, while being cost-effective and secure. This technology will allow companies to automate the process of monitoring data and ease the reporting process to regulatory bodies. All the reporting can be done in real-time by using data analytics. RegTech, therefore, fills the current gap in the financial sector by bringing technology to address regulatory challenges, since many firms’ current regulatory practices constitute to legacy and manual processes that are no longer feasible to address the growing list of regulatory obligations. Additionally, with the growing number of fines assigned to large institutions, as well as breaches and fraud touching reputable organizations, regulatory bodies are closely monitoring the entire industry and in turn, reporting standards and transparency have become more important than ever before for firms to ensure their compliance. Large firms especially are under the magnifying glass concerning their regulatory actions and should have a plan in place to digitize these processes to avoid noncompliance repercussions.