Regtech

3 Reasons why RegTech is the Future of Innovation?

Regulatory Technologies, commonly referred to as RegTech, is an innovative use case of Financial technology building on the fintech security. According to an estimate, USD 118 Billion will be spent on regulatory and compliance software by 2020. After all no matter how innovative Fintech becomes, no digital business will be interested in it unless it adheres to the regulatory compliance that the business has to follow. Simply put, a Document verification service or an identity verification solution is of no use to a European company if it does not comply with GDPR. So it is pertinent that instead of just integrating fintech solutions, businesses opt for Regtech solutions and in case you have been living under a rock for past 2 years and don’t know what is RegTech, then read the following lines carefully:

What is RegTech?

The term was coined by Deloitte and according to Investopedia it was “created to address regulatory challenges in financial services through innovative technology”. So basically it is an extension of Financial Technology that not only helps in performing complex and complicated tasks of financial service industry but also helps comply with regulatory compliance. Regulatory technology takes into account, regulatory guidelines issued by financial regulators overseeing the operations of their potential clientele. Fintech security can be enhanced by using RegTech such as a identity verification solution that follows the privacy law and data protection protocols applicable in a given territory.

Features of RegTech

Regtech industry is currently growing rapidly with solutions ranging from automated business verification to AML services being devised in various forms. But despite having applications in multiple industries, RegTech share some common features such as:

Highly Structured – RegTech Industry has been able to deliver highly structured regtech solutions that had impeccable scalability despite having multiple layers of operations and digital tasks. An online ID verification service, such as Shufti Pro, can perform identity checks not only for officially issued identity documents but can even use customized identity documents for authenticating a person’s identity.

Swift Performance – It is a given that FinTech & RegTech are quick at processing any digital procedure. It ensures not only better customer satisfaction but a smooth pipeline for interaction between a human resource and a Regtech solution as well.

Smooth Integration – Regtech Industry mostly offers solutions that are required to be integrated with pre-existing software, online systems or web-based services. It may be know your customer service or a document verification solution, but flawless integration is important for any Regulatory Technology.

Future of RegTech

RegTech industry has a huge potential of earning revenue as most of the market for RegTech is untapped. Moreover, there are new financial systems and digital platforms that are in need of innovative regtech solutions. Regtech for Blockchain and Cryptocurrency RegTech can help these new age business platforms to achieve a level of transparancy and legitimacy. This will help them curry favor with not only their regulators but their investors and potential customer base as well.

Banks are already pushing financial regulators to allow them in the adoption of improved fintech and it is high time that businesses around the globe start utilizing fintech & regtech to perform a range of digital services that fall within the purview of regulatory compliance as well. Fraud prevention can be performed with Online ID verification and a document verification service can come in handy for a remote service provider.

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Fintech trends to look forward

4 Fintech trends to look forward in 2019

FInTech has come a long way from being a mere futuristic technology and has achieved scalability by making strides towards large-scale public adoption. Investments are pouring in and new startups are mushrooming in every geographical region of the world, offering multiple financial technology trends that are enabling conventional finance world, introducing new banking technology innovations and creating a transparent environment to conduct online banking. Fintech companies were able to process $3.5 trillion in global transaction value by the end of 2017 and the safest projections estimate that the volume will swell to $8 trillion by 2022, showcasing an annual growth rate of 18%. The ability of Financial technology to tackle online fraud and help with compliance related issues has also pushed banks all over the world to force their regulators to approve integration of new FinTech with their banking operations.

Biggest Opportunities and challenges for Fintech                                                                                                                 Source: 16best.net

 

Financial Technology has surely outlived the hype, unlike many other technologies that promised to deliver a new future but failed miserably in the end. Self-driving cars, we are looking at you. But enough about past, let’s talk about the future, the future of Fintech and some leading fintech trends that will be giving rise to new technology in financial services in 2019.

Big Money is Coming

FinTech has not only resolved the issues related to conventional banking and finance world but it was able to earn deep pockets for itself in recent years. Looking on year on year growth for Fintech investment,  it is expected that by 2020 Financial Technology startups will be able to more than double their investments from what they were in 2015. The biggest catch is that the largest spike in investment charts is expected in 2019.

 

Statista Stats

                                                                                                                  Stats courtesy: Satista

 

Expected ROI to jump

Fintech gurus took notice when they heard, “with great power comes great responsibilities”. So they are going to ensure that powered by great investments, Fintech sector was returning substantial ROI for the trust shown on their abilities to introduce new technology in financial services. In a recently released report, it has been estimated that fintech sector will be expected to offer 20% ROI to its investors. So whether it is remote account opening services or the ability to perform AML compliance in real-time, fintech trends in 2019 will not only be productive for their customers but for their investors as well.

Blockchain Adoption

Yes! You read it right, Fintech will be moving towards Blockchain as it is the way forward for the financial world if they want to fight with frequent data breaches exposing confidential and highly sensitive financial information of their customers. The best thing is that financial services, or more accurately, the fintech startups that will be working with the financial industry are very open to the idea. 77% of them expect that blockchain will be part of an in-production system process in the coming years.

Blockchain Adoption

Increased Regulations

2019 will see more financial regulators and banking watchdogs issuing guidelines to make FinTech compliant with national and international laws. It will assist in streamlining of various types of fintech and fine-tuning of scalable fintech products. New banking technology innovations will finally be able to integrate with multi-national banks.

Financial technology trends in 2019 will help fintech startups with even the most humble origins to become part of the big league in the financial world.  Financial compliance coupled with large investments will enable larger banks to either partner up or sign merger plans with fintech players with the most innovative players of the fintech industry.

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