Dubbed as the new fintech, regtech’s growth prospects remain strong as it continues to disrupt the regulatory landscape by providing technologically advanced solutions to cater to the ever-increasing demands of compliance within the financial industry. Financial companies are undertaking reviews of their overall compliance strategies in line with the growing emphasis on consumer rights and data privacy, as demonstrated by the Global Data Protection Regulation in the European Union and the California Consumer Privacy Act.
The bar is set higher for participants in financial markets across the globe in terms of the standards of regulatory behavior. To enforce those standards, regulators continue to seek greater transparency through regulations such as Markets in Financial Instruments Directive II while also introducing new surveillance systems such as the consolidated audit trail in the U.S. Financial industry regulators are taking a more vested interest in regtech sandboxes as fintech and regtech are closely related, being fast-growing, highly creative fields. Advances in one sector often find immediate application in the other.
As the regulatory industry adopts a more granular and data-driven approach to supervision, financial institutions need to keep up with ongoing regulatory challenges through the use of emerging technologies in regtech. Not to be left behind in the technology race, regtech solution providers are enabling automation of risk management and compliance processes through big data analytics, real-time reporting, and cloud. On a global scale, banks are employing regtech solutions for e-know-your-customer and real-time anti-money laundering screening, AI/ML-based fraud prevention, and real-time compliance monitoring.
The adoption level of regtech solutions has increased in banks primarily in the areas of advanced risk management and end-to-end automated reporting. In the anti-money laundering sector of finance, the emphasis continues to be on cost reduction with regtechs offering solutions that can reduce the number of false positives, allowing compliance and risk professionals to focus their time on real issues.
In a nutshell, regtech operates across various spheres in financial and regulatory space, including employee surveillance, compliance data management, fraud prevention, and audit trail. Financial services firms are using every resource at their disposal, especially advanced regulatory technology, to maintain compliance while looking for new ways to establish a competitive advantage.
This edition of Banking CIO Outlook lists regtech solution providers that are making a mark in this regard. A distinguished selection panel comprising CEOs, CIOs, VCs, and the Banking CIO Outlook’s editorial board has selected a list of the top regtech solution providers that leverage innovative technologies and strategies to drive client success. We present to you Banking CIO Outlook's “Top 10 RegTech Solution Providers - 2019.”