bankingciooutlook

Regtech: What You Need To Know

Banking CIO Outlook | Thursday, May 26, 2022

Regtech tools track online transactions to detect issues or irregularities in the digital payments space. The financial institution analyzes any outliers to determine if fraudulent activity is occurring.

Fremont, CA: Regtech uses technology to manage regulatory processes within the financial industry. Its main functions include regulatory monitoring, reporting, and compliance.

Regtech: A Basic Understanding

Regulatory technology is a community of companies that automate solutions to challenges arising from a technology-driven economy. With the rise of digital products, there have been more data breaches, hacks, and other fraudulent activities.

With big data and machine-learning technology, regtech reduces the risk to a company's compliance department by providing data on money laundering activities conducted online.

Regtech tools track online transactions to detect issues or irregularities in the digital payments space. The financial institution analyzes any outliers to determine if fraudulent activity is occurring. Identifying potential threats to economic security early on can minimize the risks and costs associated with lost funds and data breaches.

Regulatory technology refers to a group of companies that use cloud computing technology through software-as-a-service (SaaS) to help businesses comply with regulations more efficiently and less expensively.

Regtech companies use cloud computing and big data to share information with financial institutions and regulatory agencies. Users can share data quickly and securely with other entities using cloud computing, a low-cost technology.

A bank that receives large amounts of data may find it complicated, expensive, and time-consuming to analyze. Regtech firms can combine complex information from a bank with data from previous regulatory failures to predict risk areas that the bank should focus on. By creating the analytics tools required to comply with the regulatory body, the regtech firm saves the banks time and money. Also, the bank has effective tools for complying with rules set out by financial authorities.

Key Applications of Regtech

Regtechs operate in several financial and regulatory fields. Regtech automates a number of projects, including employee surveillance, compliance data management, fraud prevention, and audit trails.

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