Article Synopsis :
RegTech is the emerging group of technologies aimed at helping financial services firms automate regulatory compliance. This report, “RegTech: The necessary innovation in the regulatory compliance space”, from Alten, explores RegTech trends and benefits.
Solution providers in the RegTech space are focusing on three areas:
- Modelling and forecasting
- Identity validation
- Real-time monitoring and behavioural analytics
- New and useful big-data-mining capabilities
- Compliance/risk evaluation apps for real-time scenarios
- Analytics related to biometrics and social media, such as Know-Your-Customer tools for anti-money-laundering (AML) compliance
- Ready-made accounting and compliance modules that interact directly with regulatory reporting systems
- Predictive modelling, to identify abnormal patterns of activity
- The enablement of more open platforms and networks for data sharing and process optimization
- A more efficient ‘packaged’ process for identifying new regulations, interpreting their implications, and allocating compliance obligations across the organization
Though RegTech is promising, insurers are cautioned not to view it as a panacea for all compliance challenges. RegTech tends to work best in quant-based scenarios, such as transaction reporting.
Where do RegTech solutions fit in the enterprise architecture? Here is a typical process flow:
Link to Full Article:: click here
Digital Insurer's CommentsBanks especially are spending heavily on RegTech. For example, according to the Institute of International Finance (IFF), JPMorgan Chase has added 13,000 new employees to support regulatory compliance at a cost of $2 billion, with an additional $600 million spent on regulatory and control technology. Big numbers.
RegTech players such as Pega, Suade, OpenGamma, and Starling are making names in the space. Their solutions reduce cost, yes, but more valuably, they reduce human error. According to Bloomberg, the world’s largest banks have collectively paid $321 billion in compliance-related fines since 2008. The cost of compliance is indeed high, but the cost of non-compliance is even higher.
Link to Source:: click here