Regulatory technology (or RegTech) has had a tremendous impact on regulatory compliance. Financial institutions and financial services companies have a lot to gain from effectively implementing it, and a key reason is that it could be a means to becoming flexible and efficient while complying with financial regulations.
With wealth management comes heavy compliance and regulatory requirements, and it is not surprising that emerging fintech companies are focusing on regtech as a central part of their solutions to financial institutions.
Case in point from Atlantic Canada, Four Eyes Financial. Their Risk 7 is a surveillance software used by compliance teams at wealth firms for KYC/KYP Trade Supervision and Suitability reviews. On their fintech side, their Digital Discovery Zone, provides dynamic, engaging, and compliant communication between Canadian wealth firms and their clients.
Making RegTech a part of their offering is an opportunity for our fintech companies to bridge the gap between user-friendly software and navigating the complex requirements of the industry.
What should financial institutions bear in mind when it comes to RegTech?
- With the amount of AI based innovation and research underway in the governance, risk management and compliance (GRC) systems, banks need to exercise caution when integrating with their core systems. Ensure the RegTech solution can capture and analyse data according to changing regulations with efficiency and consistency, while prioritizing safety and security for all parties involved.
- Update legacy technologies if you plan to use RegTech for financial crime management. RegTech relies a lot on machine learning, which relies heavily on how data is linked within the financial institution.
- Have leadership with knowledge and experience with RegTech solutions, so they can review their options against the complex needs of their financial institution to make decisions on innovation, R&D and partnerships with fintechs.
Lori Weir, CEO and Co-Founder, Four Eyes Financial
