According to its definition, RegTech is the convergence of two worlds that apparently seem opposite. Regulation and Technology. It is the adoption of the latest technologies to facilitate compliance with regulatory requirements.
RegTech is Regulation.
Therefore, RegTech is to speak of Regulatory Compliance. It is talking about Anti-Money Laundering and Terrorism Financing (PBCyFT), the new European Digital Payments Directive (PSD2) or the new European Data Protection Regulation (GDPR) that has caused so many headaches and keep on causing.
Those professionals who, in the last decades, have been linked with Compliance, have witnessed the evolution that this world has had. Regulatory updates have been constant with the consequent compliance problems, both in time and in form. In addition, we must consider the efficiency and effectiveness problems of old solutions. These solutions have not evolved at the same rhythm of regulation or technology. For example, there are many professionals in Anti-Money Laundering, who continue to deal with a huge amount of alerts for the impact caused by false positives.
RegTech is Technology.
On the other hand, talking about RegTech is talking about Big Data and Advanced Data Analytics. It is Artificial Intelligence and Machine Learning, Biometrics and Blockchain.
In short, it is to use technology for automating Compliance processes and to provide the necessary efficiency and effectiveness. Naturally, RegTech is, also, agility and adaptation to regulatory changes
RegTech is Add.
However, RegTech is also to improve user experience. It is to streamline the digital processes of contracting our products and/or services through biometric solutions and facial recognition (On Boarding). It is, to put the company at the technological forefront, improving its brand and its arrival to a greater public, without assuming additional risks to a face-to-face contracting. It is to reach an increasingly demanding and fleeing unnecessary bureaucracies public. It is, therefore, to innovate and gain competitiveness.
In short, RegTech is the Digital Transformation brought to the world of Regulation.