regTech

Regtech, short for regulatory technology, is the use of information technologies to help organizations comply with regulatory requirements more efficiently and effectively. Originally focused on financial services, regtech now spans banks, insurers, asset managers, and other regulated sectors. Its aims include reducing the cost of compliance, improving accuracy, and speeding up reporting and governance.

Regtech solutions automate and enhance functions such as regulatory reporting, anti-money laundering and know-your-customer screening, conduct and market surveillance, risk and compliance management, identity and access management, and third-party risk monitoring. They often rely on data integration, analytics, machine learning, natural language processing, robotic process automation, APIs, and cloud computing to pull data from multiple sources, interpret regulatory changes, and produce audit trails.

The field grew in response to rising regulatory complexity after the financial crisis and the growth of data volumes. Regulators have encouraged regtech adoption through innovation hubs, sandboxes, and open data initiatives, while firms seek scalable, repeatable controls that can adapt to evolving rules.

Benefits include lower operating costs, faster autonomous reporting, improved risk detection, and better governance. Potential drawbacks include implementation risk, data quality and privacy concerns, model risk with AI systems, security vulnerabilities, and the challenge of integrating regtech with legacy systems and existing controls.

The regtech market comprises a range of vendors and solutions, from point tools to integrated platforms, with use cases across finance, insurance, and other regulated industries. As regulatory landscapes evolve, regtech is seen as a key enabler of ongoing compliance rather than a one-off project.