Stemming from financial service providers appetite for efficient systems to handle new and complex regulatory and compliance demands, the volume of applying technology to manage risk and compliance has grown drastically. Since the GFC, regulators have implemented complex and extensive regulatory requirements which have driven the expansion of IT and compliance in the financial industry globally. Firms are beginning to adopt systems supporting centralised risk management and compliance functions to adapt to the changed regulatory and compliance environments.
While FinTech slowly embraces the monetisation of data, the regulatory framework for the finance industry will need to be modified to cover unnecessary approaches such as data sovereignty and algorithm supervision. The development of FinTech is in need to be built around a new framework called RegTech.
The following identifies how RegTech should be moving forward: