By FINTECH Books Contributor, Mona Zoet Follow: @quedo As the global economy shifts towards a data-driven economy, the emergence of ‘big data’ and rapid developments in technology have begun to revolutionise the Regulatory space in the financial sector. Driven by burgeoning compliance costs, disruptions to the financial sector through FinTech and the need for granular insights based on data and analytics, the unique characteristics of RegTech have since allowed it to stand at the centre of this movement providing flexibility, speed and robust analytical capabilities in its solutions. However, looking beyond the immediate benefits of reduction in compliance costs, RegTech promises so much more. Developments in cognitive systems and machine learning are behind the revolutionary force sweeping across the Regulatory space in the financial sector. Building on the paradigm shift towards a ‘data-driven’ economy, the usage of advanced data analytics holds the potential to change existing regulatory models from a fire-fighting exercise against compliance breaches to a predictive tool, allowing both users and regulators to tackle regulatory challenges before it appears. Hence in the long term, RegTech will allow both regulatory bodies and users to adopt a more forward-looking approach in risk management through the availability of better insights and oversights contained in the ‘big data’. Finally, the resulting market stability from increased protection of financial of institutions will also further inspire consumer confidence and promote positive customer experiences in the long run. In closing, whilst RegTech was initially developed to tackle compliance reporting within financial institutions, the potential captured by RegTech to revolutionise regulatory spaces is not just limited to financial regulation, but rather across all other industries, such as healthcare, which will benefit from a forward-looking regulatory model in tackling regulatory challenges before breaches occur.

If you would like to learn more about FinTech please look at our video courses at FINTECHCircleInstitute.com