Why is it becoming the next big thing?
To be honest, Regulatory Technology (RegTech) is already a big thing, & more companies are adopting it everyday. Deloitte has dubbed #RegTech as "the new #FinTech" & since 2015, it has risen to prominence rapidly.
So what is RegTech?
Humans are great at creating abbreviations, so it is no surprise that RegTech means Regulatory Technology. In an easy-to-remember definition, RegTech is a technology that aims to create nimble, configurable, easy-to-integrate, reliable, secure & cost-effective regulatory solutions for businesses.
Another way to think about it is that RegTech is the management of regulatory processes within the financial industry through technology. The main functions of RegTech include regulatory monitoring, reporting & compliance.
RegTech consists of a group of companies that use cloud-computing technology through software-as-a-service (SaaS) to help businesses comply with regulations efficiently & less expensively. (Investopedia, 2019).
The community includes passionate technology companies that aim to solve challenges arising from a technology-driven economy through automation. The rise in online e-commerce & digital products has increased data breaches, cyber hacks, money laundering & other fraudulent activities.
Regulatory Technologies aim to help monitor & prevent such fraudulent & criminal activities. By investing in such technology solutions, businesses can help eliminate the $100 billion+ (USD) worth in damages collectively caused by Terrorism & other criminal activities globally. It can be as simple as preventing a pre-paid sim-card transaction from occurring anonymously, but every effort made towards moving RegTech adoption forward can ultimately change the future for generations to come.