Regulatory technology, or RegTech, was developed in the wake of the FinTech revolution and has been continuously expanding since the financial crisis of 2008. Experts predict it will rapidly advance the regulatory landscape by offering technological compliance solutions for the highly regulated financial services industry.
According to Investopedia, “Regtech is the management of regulatory processes within the financial industry through technology. The main functions of RegTech include regulatory monitoring, reporting, and compliance.”
In basic terms, RegTech allows financial institutions and other financial services companies to leverage advanced software—powered by big data, artificial intelligence (AI), and machine learning—to simplify and expedite the compliance process within the framework of existing laws and regulations. This enables them to reduce administrative overhead costs, protect their consumers, and gives their organizations another level of compliance protection.
This compliance-based technology has been praised in the industry for its speed, flexibility, integrative capability, and analytical power. In this blog post, we’ll take a look at how RegTech is improving efficiencies in the financial services industry.
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