In our heavily-induced influencer world, there’s a never-ending push for taking risks and making your own name. But just like jumping into the ocean when you can’t swim is dumb, so is jumping into business without any regard for policies and regulations. Yikes!
Regtech is the merger of regulatory and technology, but before we added the tech to the reg it was just plain old regulatory compliance. “What is that?” you ask! Regulatory compliance refers to how an organization should follow laws, regulations, guidelines, and specifications relevant to its business processes. That means no funny business is allowed! Some regulatory compliance rules especially focus on one area which is data protection.
Enters tech. Regtech manages businesses’ regulatory processes in the financial world. As the world leans more towards digitalization and automation, more creeps try to steal your information. Regtech however allows companies to be in on any cyber hacks, data breaches, money laundering, or other fraudulent activities through Big Data and machine learning (ML) technology.
Where regtech and fintech meet
Unlike wealthtech, people don’t confuse fintech with regtech, they do say that regtech is the new fintech. However, regtech is certainly not replacing fintech, nor can it ever will because both of them are equally important for different reasons and are used for different purposes.
Regtech has become one of fintech’s important support systems. One of the main areas fintech operates in is digital payment and regtech companies utilize tools to monitor online transactions and check if something seems off. Through regtech, organizations could spot any threats to lessen risks before it’s too late.
Regtech companies come together with financial institutions and use cloud computing and Big Data to share information and be able to predict potential risks or threats. So for instance, going through previous thousands of data to predict potential threats would not only cost a company money but also valuable time. Regtech solutions enable all this in no time through its analytical tools.
Regtech software is nothing but a package of business goods. Whether it’s the cost, agility, speed, flexibility to use data for multiple purposes, or security, regtech has got you covered. One of the most successful companies that offer regtech solutions is Trulioo, which uses online electronic ID verification for billions of people worldwide. Vizor is also another company which uses regtech software that enables financial regulators to simplify and improve financial regulation systems.
By not separating fintech and regtech, the financial world could be unstoppable!