Exploring Regulatory Tech, often referred to as RegTech, leads us into a rapidly evolving domain at the intersection of technology and regulatory compliance. This innovative field harnesses the potential of advanced technologies like artificial intelligence, big data analytics, and blockchain to help companies meet stringent regulatory requirements more efficiently and at a reduced cost.
As financial markets grow more complex and regulatory bodies impose more intricate compliance standards, the need for real-time, automated solutions becomes paramount. RegTech not only streamlines the compliance process, but it also reduces human error and the associated risks, enabling businesses to maintain agility and remain competitive in a tightly regulated environment.
Furthermore, as the landscape of global commerce continues to change, RegTech promises to be a critical tool in ensuring that companies can adapt swiftly to new regulatory challenges.
Exploring Regulatory Tech
When it comes to KYC-related tech, so-called Regulatory Tech is still quite new and a developing field for solution providers and small as well as even public companies. Their business model is to support companies in satisfying their regulatory requirements by offering certain digital services. This can concern very different aspects of a company’s regulatory needs.
For example, in the field of so-called Client Lifecycle Management specialized service providers offer a company to care for their customers for the whole circle of their business relationship with the company.
Such providers often help companies to pre-define their own risk policies and then apply them to their customers for the whole time that they are doing business with them. Aspects such as putting the customers into their respective risk categories and checking them on a periodical basis are done mostly automatically.
Companies can get further support from so-called case management platforms. These solution providers help with the organizational processes necessary to deal with a large number of customers.
The question of whether companies should build up such technological solutions by themselves, rent or just outsource them should be answered by the company management under consideration of different aspects. For example, this can be decided based on the cost and efforts of designing and building an automated solution, how suitable this is for the specific purpose, and if this still provides a satisfying customer experience.
Choosing the right technology provider under the many available can be a challenging task. However, in the long run, in almost every case this will prove to be very valuable for the company.
Final Thoughts
Regulatory Tech, especially in the realm of KYC and Client Lifecycle Management, signifies a burgeoning arena for solution providers catering to diverse corporate needs, ranging from small enterprises to public companies. These providers endeavor to digitalize and automate critical regulatory aspects, assisting companies in categorizing customer risks, conducting periodic reviews, and streamlining vast organizational processes through case management platforms.
While the dilemma of whether to internally develop, lease, or outsource such technologies lies with a company’s leadership, it necessitates a judicious assessment of factors like cost, purpose-specific suitability, and customer experience implications. Despite the inherent challenge of selecting an apt provider amidst a plethora, a well-informed decision can invariably enhance a company’s long-term value and efficiency.
