RegTech or Regulatory Technology allows businesses to manage their compliances effectively. Businesses in the financial services will find RegTech highly beneficial. Financial service firms have significant regulatory and statutory norms to comply. Non-compliance can lead to serious problems. This is where RegTech would help them observes Bahaa Abdul Hussein.

What is RegTech?

Regulatory Technology or RegTech is the use of technology to help a business handle its regulatory compliances. RegTech uses latest technologies like machine learning Artificial Intelligence, and natural language processing to make regulatory compliance effective. With increased regulations, businesses are spending more time and effort on compliance work.

This is true in the case of financial services firms where it is critical for follow regulatory norms. At the same time, businesses don’t want to be bogged down in handling complex compliance. RegTech offers tools that help businesses run their operation as per regulatory norms and manage compliances seamlessly.

RegTech in Financial services sector

They are 4 key aspects involved in RegTech. They are:

  1. Regulatory monitoring: Regulatory content is provided to help businesses understand norms and give them access to resources.
  2. Regulatory obligations: Regulatory knowledge is provided to businesses, so they clearly understand what they need to follow.
  3. Compliance management: Workflow systems have all the regulatory information like policies, controls, and procedures. This helps businesses track their compliance and manage it well.
  4. Execution: All tasks carried out can be executed in compliant ways. They can also assess compliance levels helping them to make corrections where required.

RegTech has a powerful impact for financial services organizations. The benefits it offers makes RegTech a key technology to use.

  • The biggest benefit RegTech offers is improved efficiency. Technology makes it easy to keep track of compliances to follow and ensure it is done. Doing compliance work manually can be cumbersome and tiring. Technology makes it simple and convenient.
  • Accuracy can be ensured in the compliance process by using RegTech. There are virtually no chances of errors. Since people don’t have to do things manually, the risk of errors is eliminated.
  • Using RegTech ensures nothing is missed out. When compliance work is done manually, there is always a possibility of some compliance being missed out. This can have serious consequences, including possibility of legal action. This risk is eliminated when RegTech is used.
  • Risk management is improved and businesses are geared up better to prevent cybercrime and fraud.
  • RegTech allows transparency in operations. It helps connect people and processes throughout the organization.

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