By FINTECH Books Contributor, Lucius Ma
RegTech has been widely discussed in financial services sector recently. It is commonly referred as a technological solution for financial regulatory compliance. Many of its applications indicate that RegTech is a software to help financial institutions in achieving compliance obligations, by the power of information technology, the software may provide more effective and efficient solutions than conventional methods. In the way, RegTech is able to assist financial regulators to implement regulations and enforceable policies on the one hand, to reduce compliance cost and operational risks for enterprises on the other.
Other than the financial institutions’ heavy duty to comply regulations and laws, non-financial industries are undertaking obligations to compliance from various sectors, such as environmental regulations, custom regulations, and labour laws. Further, the compliance duties mentioned previously may be implemented through private contractual obligations.
The example of compliance of contractual obligations can be found in Taiwanese technology manufacturers. Compliance of contractual obligations is a pivotal factor that enable these manufacturers to be trusted by the customer from the globe. Profitable manufacturers have often built a framework to comply the contracts or agreements with buyers stringently.
Similar to compliance work in financial sector, compliance work in non-financial sectors is a mundane and costly task.Since the RegTech can provides effective and cost-efficient solutions for regulatory compliance, it is conceivably able to assist non-financial enterprises in compliance of contracts. In addition, RegTech can be further used in enterprises’ internal control activities, integrating into company’s Enterprises Risks Management Structure, thus optimising the value of risks management.
Since compliance may be crucial to the development of enterprises both in financial and non-financial sectors, RegTech should not constrain its development within financial sector, applications in other sectors are worthwhile to explore.
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