Guest ArticlesHow Fintechs can use regulatory advisory solutions to encourage growth and innovation

Innovation in technology means that Fintechs must race to innovate with new tech. So how can Fintechs foster growth but stay with financial regulations?
Rohini GuptaOctober 13, 202212 min

Growth and innovation in technology mean that Fintechs must race to innovate as new technologies emerge. Continuous advancements, however, lead to the risk of penalties from regulatory bodies. So how can Fintechs foster growth but stay in line with financial regulations?

Unprecedented growth and advances in technology have meant Fintech is in a constant state of flux. As new technologies emerge, Fintechs race to catch up or risk falling behind their competitors. However, continuous innovation also means making sure new developments are incorporated in a streamlined way into current operations and are also protected against cyber threats.

Regulation remains another hurdle in the constant cycle of innovation. Each new change to technology must remain compliant with current regulations or Fintechs face fines and penalties for not complying with legal requirements.

Of course, Fintechs could reduce the likelihood of penalties by taking innovation slow but doing so may result in stagnation and that’s a risk most tech companies can’t afford to take. When it comes to conforming to regulatory obligations and balancing those obligations with innovation, Fintech companies need to aim just right.

It is possible for tech companies to maintain a balance between innovation and regulation, adapting to a changing industry and avoiding potential issues with regulators. Using regulatory advisory solutions to promote innovation and growth, these technologies can help significantly reduce risks and costs.

The Advantages of Regulatory Advisory Services for Businesses

Process Innovation Increases Corporate Value

Regulatory platforms can assist financial organisations greatly when adequately implemented. These platforms help increase financial crime detection, improve compliance processes, and reduce costs. Eliminating manual processes and human bias in compliance management also optimises budgets.

By utilising their current resources, organisations can use technology to support their growth. The platform processes vast amounts of data from internal systems and outside sources. This function supports compliance procedures like underwriting and counterparty credit analysis.

Organisations can also recalibrate their labour strategies by using these digital technologies. For instance, compliance platforms can help organisations reallocate staff to more value-driven tasks. The platform can automate routine compliance management tasks. These functions enable firms to get more out of their financial compliance procedures.

Boost internal communication in the business

It takes cooperation between departments and the regulatory team to meet regulations. But when it comes to compliance management, there is often very little coordination inside the organisation. This oversight results in needless delays, which can result in fines and even inhibit innovation.

A tool that enhances departmental cooperation can help regulatory teams. Regulatory advisory systems can automate specific tasks like compliance mapping. Regulatory teams can then comprehend department duties and allocate them to pertinent employees.

Better department coordination leads to optimised business functions. There are changes that Fintech firms can make to streamline processes, save costs, and boost productivity.

Stricter Regulation Processes and Monitoring

Regulatory advisory services encourage development and innovation through rigorous monitoring methods. Most RegTech platforms use cutting-edge technologies. Consider cognitive machine learning and natural language processing; these tools are gaining momentum.

By using these technologies, organisations can gain better insight into how they adhere to regulations. Organisations can detect and address any risks in their compliance procedures. Thanks to increased insight into processes, lowering the likelihood that they would commit a violation and face a steep fine.

Additionally, organisations can use this detailed data to enhance daily operations. For instance, they can incorporate resilience into operating procedures to lower operational risk. When digital technology is upending the financial sector, this encourages organisations to engage in more experimental initiatives. More robust processes make innovative strategies less costly and more appealing.

Innovation and Regulation – Finding the Balance

Organisations must manage innovation and development while adhering to stringent financial regulatory norms. Trailblazing technology, such as blockchain and AI, continues to shake up financial services. Integrating automated compliance technology allows financial organisations to transform compliance management. This means that compliance becomes a driver of innovation and expansion.

Most RegTech solutions leverage cutting-edge technology, including AI and machine learning. These advancements remove obstacles to innovation and growth. Interdepartmental communication and resource use improve, and experimentation expense decreases. This approach is crucial for fostering innovation while adhering to regulatory obligations.

In the not-too-distant future, RegTech will be an indispensable component of regulatory processes. It has the capacity to ease burdens and make tasks more straightforward, despite the growing complexity of compliance responsibilities.

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Rohini Gupta, Director and Lead Regulatory Advisor at FinregE

Rohini has over 15 years of experience in a wealth of areas including asset and wealth management, investment banking and retail banking, capital markets and financial services. Rohini started FinregE in 2018 and is the brains behind FinregE’s regulatory interpretation and compliance workflow solutions, which are designed based on her extensive hands-on experience and domain knowledge in regulation and compliance.

Rohini Gupta

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