Why RegTech Solutions Are Vital to a Successful Banking Service

The financial sector has witnessed an increase in regulations; thus, RegTech ensures efficiency and smooth adherence to rules for customers and professionals.
FTB News DeskNovember 20, 202311 min

Table Of Contents

Understanding RegTech

  1. 1. Relationship Between RegTech and FinTech
  2. 2. Use Case of RegTech in Banking and Financial Services
  3.     2.1. Identity Verification and Management
  4.     2.2. Regulatory Reporting and Case Management
  5. 3. RegTech Companies
  6.    3.1. Ascent RegTech
  7.    3.2. Socure
  8.    3.3. Hummingbird
  9. 4. What is the Future of RegTech?

To sum up

Understanding RegTech

RegTech is a tech management regulatory body that operates processes within the financial industry with the help of technology. These RegTech companies solve financial problems for top-level financial professionals in a technology-driven economy through automation. With the use of big data and machine learning technology (ML), RegTech reduces the risk to a bank or financial institute’s compliance department by offering data on numerous activities that were previously conducted traditionally. However, in today’s article, we will focus on how the RegTech industry collaborates with financial institutions and regulatory bodies to ensure a seamless security process.

1. Relationship Between RegTech and FinTech

RegTech and FinTech are two distinct industries that have a beneficial relationship. The growth of FinTech entities like banking, non-banking services, and financial entities has led to the emergence of RegTech solutions to help them comply with regulatory requirements. RegTech companies specialize in providing technology solutions that help financial institutions by offering to monitor compliance in real-time, reduce the expense of compliance, and improve the accuracy and effectiveness of compliance actions. Thus, the relationship between RegTech and FinTech is mutually beneficial and expects to evolve and grow stronger continuously.
While RegTech solutions focus on helping, managing, and adhering to regulatory requirements, they still cover a wide range of use cases in the financial sector. Let’s take a look at a few of them.

2. Use Case of RegTech in Banking and Financial Services

RegTech has a wide scope of use cases and applications in the financial industry, starting from identifying and verifying customers to monitoring and screening transactions. Let’s take a few of the most common use cases of RegTech in financial services:

2.1. Identity Verification and Management

Digital identity verification is an essential part of any modern banking or financial institution, as they use a data set that includes name, address, date of birth, and personal information about an individual. Here, the RegTech software collects, stores, and verifies the data using KYC/KYB procedures to ensure the individual’s real identity. There are a few RegTech tools as well that can analyze your customer’s written documents and oral speech for a multi-step verification process.

2.2. Regulatory Reporting and Case Management

In the past, financial professionals have seen that it is difficult to maintain hard copies of all transactions and documents. Thus following regulations by regulatory institutions was difficult which made

3. RegTech Companies

RegTech solutions are becoming ever more critical to banks and other financial institutes, which are looking for companies that ensure stability in today’s world. Here are three companies helping unlock RegTech possibilities:

3.1. Ascent RegTech

Ascent RegTech, a leading global regulatory compliance company that uses market-leading RegulationAI, helps customers in financial services automate their compliance programs, significantly reducing their risk while saving time and money.

3.2. Socure

Socure’s RegTech services are used in an array of industries, from finance to gaming as it has a predictive analytics platform that applies AI and ML techniques with trusted online and offline data intelligence from email, phone, address, and IP, to confirm identities in real-time.

3.3. Hummingbird

Hummingbird is an anti-money-laundering platform used by banks and other financial entities that aims to reduce paperwork, provide insightful analytics, and enable collaboration between compliance professionals and law enforcement agents.

4. What is the Future of RegTech?

The future of RegTech involves automation and simplification across all organizations and industries. However, RegTech is constantly evolving in the financial sector as banks and financial institutes are developing new and innovative products and services that need new regulations, which implies an increase in compliance costs. Financial service providers are therefore investing in intelligent RegTech solutions that provide modern solutions and reduce the cost of regulatory compliance. For instance, HSBC alone spent $2.2 billion on regulatory and compliance activities in the first nine months of 2015. In the same way, financial institutions’ overall compliance expenses are predicted to increase annually to $120 billion over the next five years.

To Sum Up

The RegTech segment is maturing and currently, every regulatory technology is on its way to transform it more digitally. RegTech adoption in the financial sector is receiving a lot of attention, but these solutions can benefit many businesses in a variety of sectors by helping them effectively drive their business and comply with regulatory requirements.

Stay Ahead of the Financial Curve with Our Latest Fintech News Updates!

FTB News Desk


We are one of the world’s leading Fintech-based media publication with our content strategized and synthesized to fit right into the expanding ecosystem of Finance professionals. Be it fintech live news, finance press releases, tech articles from Fintech evangelists or interviews from top leaders from global fintech firms, we give the best slice of knowledge topped up with the aptest trends. Our sole mission is to help tech and finance professionals step up with the rapidly emerging Fintech civilization and gain better insights to emerge victorious in every possible way. We adopt a 360-degree approach in order to cater to present a holistic picture of the fintech arena.

Our Publications

FintecBuzz, 2024 © All Rights Reserved