RegTech Is Here & Going Mainstream
RegTech (short for regulatory technology) is a term that has been bubbling for several years, but if the latest research is true, its time has certainly come. This research predicts spending growth from $18bn in 2018 to $115bn in 2023. It is easy to see why. Regulation – across financial services business, and other less regulated sectors – is growing, with CECL, GDPR, CCPA, and others making an impact. Regulators are also looking for more transparency in how results were created, technically and operationally.
This puts organizations in a bind. More regulations, and more scrutiny means more effort, more budget and more time, when businesses are looking to be more fleet-of-foot, and more cost conscious. This is proving true for businesses large and small.
RegTech’s true value is its ability to implement quickly and deliver value quickly. In smaller organizations, it is being used to automate processes that have been done manually, or not at all, exposing them to unacceptable risks. In the larger organizations, they are replacing manual, expensive processes, often complimenting legacy systems, in new business units that need to make an impact fast.
This trend has not gone unnoticed at ClusterSeven. One of our customers, Rabobank, are using RegTech capabilities to enhance the management of their attestation management. This is a complex area, covering non-standard transaction compliance issues, policy review and enforcement, third party, contract management much else besides. Previously managed using time-consuming manual processes, RegTech capabilities allow them to automate and develop the management of highly unstructured processes. These enhance their business processes, their business agility, and their cost base.
Rabobank are not alone in recognizing the benefits of RegTech; regulators also observe the enhanced capabilities the technology offers firms looking to meet the increased regulatory transparency that they demand. In light of this, it is likely that RegTech is something we will all be hearing more about in the not too distant future.