Find the Best Regtech Solutions - Everything about RegTech

Regulations are essential in forex trading. Where there is trading, there is a market, hence the emergence of regtech. As a new technique focusing on improving regulatory process with IT, regtech is often considered a subbranch of fintech, with its emphasis on regulations, reporting and compliance etc. It is applied in any field overseen by regulators, but mostly in finance.

What is Regtech

According to FCA, the first governmental body to establish and promote the term RegTech, defining this as, "RegTech is a sub-set of FinTech that focuses on technologies that may facilitate the delivery of regulatory requirements more efficiently and effectively than existing capabilities".

Characteristics

Regtech is often known for having the following characteristics:

Agility - cluttered and intertwined data sets can be decoupled and organized through ETL (Extract, Transfer Load) technologies

Speed - reports can be configured and generated quickly

Integration - short timeframes to get solution up and running

Analytics - Regtech uses analytic tools to intelligently mine existing "big data" sets and unlock their true potential e.g. using the same data for multiple purposes.

Although often believed to be focusing on digitalizing manual reports and compliance processes, a 2016 academic paper by Douglas W. Arner et.al, published on Northwestern Journal of International Law & Business, suggested that regtech has the potential to allow a near to real-time and proportional regulatory framework that identifies and resolves risk while also permitting significantly more efficient regulatory compliance.

Opportunities

What makes regtech stand out is its automation, which makes compliance not a pain in the neck again. Thanks to AI and machine-learning, the algorithms simplify compliance processes through coding, and filter out the latest laws in a highly-efficient manner, while ensuring the transparency and consistency of regulatory reporting.

As a result, workload is reduced greatly, and reliance on manual work is relieved, not to mention minimized risks of errors or deviations.

Risk management comes in as another opportunity. With big data and analysis in use, regtech detects the real reasons behind each violation, and quickly identifies potential risks, compliance issues, fraud and even chances to boost businesses.

Regtech is in need of better data governance

Regtech runs on data, which might come from regulators, or the regulated.

For instance, Banque Nationale du Rwanda (BNR) adopted the so-called data-in-stack approach, and used electronic data warehouse to capture data from regulated financial institutions.

So here are the questions, what data to capture / what not to? Who has the right to capture? What to do after capture? To what extent should the data be used? Are business secrets, private information being jeopardized? What measures are in place to prevent data disclosure? All of these questions need to answered with laws and regulations. So far, they still remain unsolved and require further research.

Accelerated institutionalization

US SEC adopted the Investment Company Reporting Modernization Rules back in 2016, aiming to create a better regulatory environment with higher efficiency through end-to-end digital reporting, modernized forms, and shortened reporting duration.

Approximately 13,000 U.S mutual funds were put under the influence after the adoption, which then turned to regtech for solutions. As a result, Unity NXT, a regulatory reporting platform presented by Confluence, stood out from fierce competition, allowing mutual funds to complete the end-to-end reporting process using verified regulatory datasets, meeting all requirements on data quality, scalability and timeliness.

Comparison of regtech firms

Hundreds of fintech firms are included in Fazzaco's "Companies"​. We have selected three of them offering distinctive regtech products / services for comparison.

Muinmos

Muinmos is a company that specializes in automated regulatory compliance with global presence. The featured regtech product of the company is Muinmos Compliance Engine, divided into three separate product modules –mPASS™, mCHECK™ and mRX™. Providing a simple, fast and efficient way of client onboarding for financial institutions to keep up-to-date and remain compliant in a fluid regulatory landscape across multiple jurisdictions.

In March 2021, Muinmos reached a partnership with RHT, a compliance solutionist.

​CurrentDesk

CurrentDesk is a broker management platform including: compliance, treasury, sales, support, KYC management, user roles, client agreements, reminders, requests, reporting and more. It makes regulatory compliance easier by streamlining KYC processing and account opening for traders.

Skale

Skale offers a secure, customizable and well-supported CRM platform, which also allows users to follow up legal requirements.

It can be seen that Muinmos is, out of the three, a relatively more specialized regtech firm with its purpose to further automate client onboarding with the help of AI and deep-learning. In a sense, a company is trustworthier if it specializes only in a certain field.

But of course, Skale and CurrentDesk are, too, offering cutting-edge CRM solutions. A CRM specials were published by Fazzaco earlier, and it is known that CRM is closely related to regulation and compliance. So like the old saying goes, never judge a book by its cover.

Learn more about regtech solution providers at Fazzaco.com. We are committed to providing the up-to-date fintech and regulatory stories and articles in first time. Precisely knowing where the industry is heading and being aware of your demands are the only way to find the best regtech solution for your platform.