By Dr AbdelGadir Warsama Ghalib, Legal Counsel
Due to increasing need to utilize new technologies in business, many new solutions are offered to help in this arena. We mention, in this connection, that RegTech, as a sub-industry of Fintech, is reaching high funding and it will continue to grow as businesses work hard to stay compliant with the new and existing regulations.
The growth of this new industry is due to many factors and reasons including, among other things, noticeable volume of regulatory requirements, big fines in case of non-compliance, clear activity in the use of technology especially after COVID-19, increased funding for RegTech companies… etc.
This new technology, no doubt, offers safer, faster and more efficient workflows and therefore institutions are expected to increase spending on RegTech solutions to streamline their role and future business.
It goes without saying that, the increased digitalization particularly in banking has given rise to a number of challenges, both to regulators and likewise to executors. There has been a remarkable increase in the services provided, however, at the same time there is also remarkable increase in new crimes, cyber-crimes, including data breaches, cyber hacks, risk of money laundering, and fraud.
By using technology, the RegTech companies have started proving that they can do a better job than normal legacy systems particularly with reference to the detection of illegal illicit activities. As we see, at present, RegTech companies operate in various areas of the financial and regulatory space.
In the financial sector, as example, the regulators across the globe have come up with a number of mandates to increase transparency and reduce risk. The sheer volume of new norms for compliance added, increased or complicated the troubles facing the financial institutions. It has been noticed that, highly regulated industries such as the banking industry is facing ever-increasing regulatory compliance obligations.
Herein, modern new technologies, such as artificial intelligence (AI), biometrics and machine learning, can be utilized by the banking and financial industries to address challenges for regulatory compliance. RegTech companies are using these technologies in their solutions to make regulatory compliance processes more efficient and effective.
The RegTech solutions have various applications such as financial crime detection and prevention, cybercrime supervision, tracking and recording compliance activities, centralization and timely submission of regulatory filings and streamlining market review workflows.
Needless to say that, they can help compliance departments achieve a greater return on investment by increasing operational efficiencies, reducing operational costs and mitigating the risk of breach of regulatory norms. Good to follow and adopt this new activity, however, the need for human professionals is irreplaceable and the professional minds along with the new machine’s abilities shall work in collaboration to benefit our society for prosperous future.
The opinions expressed are the author’s and do not necessarily reflect the views or have the endorsement of the Editorial Board of AfricaNewsAnalysis
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