A video created by Deloitte Consulting some moons ago aptly describes why Regulatory Tech or RegTech as it was affectionately called would go beyond being just a part of FinTech. In other words, it has moved way beyond being just a buzzword half-a-decade ago, thanks to ever-increasing costs of compliance coupled with the growing list of stringent regulations in the entrepreneurial world.
Today there are several players who offer these solutions with real-time compliance analytics that support enterprises and regulators while protecting consumer interests. One such name is Bahwan CyberTek, a player that ideates on new regulations and risk management principles and brings innovative solutions to meet the ever increasing demands of compliance within the financial industry. In an exclusive interaction with CXOToday, Jaya Vaidhyanathan, CEO, BCT Digital, explains why RegTech is on the rise and why it matters in the age of compliance.
CXOToday: Do you think the world is ripe for a RegTech revolution just like fintech?
Jaya Vaidhyanathan: The last big wave of disruption in industries like BFSI was digital, which has played out beautifully in terms of power to the customer. Almost all transactions can be completed online and the need for customers to visit their banks has minimized. This has indeed put a lot of pressure on banks to remain competitive and the net result is an overall improvement in service quality from the sector as a whole. However, the focus on customer satisfaction cannot yield results without a commensurate focus on the financial institutions’ health. This is where RegTech comes into play, and we believe this next wave of disruption will transform the industry yet again, with the growth of the economy being fueled by lenders who are themselves in good health.
The global RegTech market revenue is estimated to be $2,321.5 million in 2018 and is expected to reach $7,207.6 million by 2023, growing at a CAGR of 25.4% during the forecast period 2018–2023. The solutions include compliance management, reporting, identity management, and risk management. The compliance management solution segment is expected to grow at the highest CAGR during the forecast period. For RegTech to succeed, it is vital to understand the risks involved, as well as cutting edge technology including the likes of AI/ML and blockchain, whose computing power can be a force multiplier in processing large volumes of data and comprehending the results intelligently. Bahwan CyberTek anticipated this wave in early on in 2014, and the result was a new age Risk Management Suite, rt360 which is running today in banks across the world.
CXOToday: Could you elaborate on the benefits that RegTech entails?
Jaya Vaidhyanathan: Recent banking reforms are forcing the industry to relinquish age-old techniques of data analysis, modelling, and adopt more rewarding technologies. One reason is that, with digitization, the volume of data has been increasing exponentially. The technology available with most banks is not adequate enough to process all of this data being generated at an unprecedented pace. So, not only is an alarming amount of data
