How Regulatory Technology (RegTech) Can Empower Financial Institutions
Authored by: Joris Hillebrand, Managing Director, Synechron
Take Control. Be in Control. Demonstrate Control
Over the last decade, the financial services industry has seen a significant uptick in regulation with multijurisdictional and interlinked regulatory requirements impacting business globally. The key element across these regulations has been that financial institutions need to ensure that they are operating their business in a prudent and controlled manner.
RegTech is a discipline which applies technological innovations to achieve compliance with regulatory requirements. It can help meet this requirement by allowing Financial Institutions to: Take Control, Be in Control, and Demonstrate Control of regulation through better defined, documented and auditable digital operations. This will allow firms to break down regulatory siloes and manage requirements holistically.
In recent years, financial institutions have become all too familiar with implementing new regulations. Due to time constraints these regulations often have been looked at in a siloed fashion. At the same time, similar or overlapping requirements exist in those regulations – e.g. transaction reporting under The European Market Infrastructure Regulation (EMIR), Markets in Financial Instruments Directive (MiFID), Securities Financing Transactions Regulation (SFTR), etc.
The increased regulatory pressure means that regulators have come to expect more of financial institutions. The room for error is becoming smaller and smaller. Financial institutions need to be able to respond to regulatory requests quickly. Therefore, compliance and risk departments are looking at how the firm can be in control of all requirements. Most importantly, the business needs to know that they are still fit for business.