Regulatory technology, commonly abbreviated as regtech is said to be the next big thing in the fintech industry nowadays. To put it simply, regtech is the use of technology to help the fintech industry with the regulatory process. Regtech will help in monitoring, reporting, and complying to the regulation that usually would take a lot of time and cost if conducted manually. While regtech will definitely change the way fintech industry operates, regtech will also bring many substantial benefits to the industry. Read on to find out what are the benefits of regtech to the current fintech industry.
Cost & time efficiency
Companies will definitely cut the compliance cost required after using regtech, since it will be done automatically. Furthermore, it will reduce the required time as well since the technology will make the compliance process simpler. Through this cost & time efficiency, the company will be able to gain a competitive advantage compared to their competitors.
Improve your risk management
With the use of right technology, companies can detect and prevent any potential risk that may harm your business. These risks include, but not limited to, market abuse, noncompliant trades, fraud, and cyber attacks from the outside party. By having an early warning system, your company will have an easier time tackling these potential threats before any major harm or damage is done.
Create a sense of security for your customer base
The use of regtech not only brings benefits directly for the company, but for their customer base as well. Because most users are reluctant to share their personal information to a relatively unknown third-party app, the presence of a well-known and secure regtech will act as a guarantee. As the customers believe that their data will not be exploited, it will make them more willing to comply.
While the benefits of regtech for any fintech companies are clear, there are still some challenges that the regtech will face on its application. Just like any other budding modern technologies, regtech will take time to develop and mature before finally being adopted by fintech companies extensively. As such, the banking and fintech industry entities must work together to drive the trends towards a larger scale in the modern world. We at SOCASH realize the importance of this emerging technology and will definitely find a good use of its application to support our business growth.