The emergence of regulatory technology
Successfully complying with the multitude of financial services regulations can be complex, time-consuming and costly. In response, new approaches to risk and regulatory management practices across the financial services sector are emerging. Increasing regulatory requirements and a rapidly evolving FinTech sector are driving the financial services industry to innovate and utilize new technologies to help navigate these issues. The objective is to lower costs, improve effectiveness and disrupt the status quo around regulatory compliance. Regulatory technology (regtech) is at the heart of this new approach.
Operating as a key component of FinTech, regtech can help to support more granular reporting standards, scenario analytics and horizon scanning, providing better insights for financial services executives. Regtech can not only provide a more automated, cost-effective way of meeting compliance and regulatory reporting needs, but also enhance consumer confidence over the long term by providing a better customer experience.
In a recent EY survey, respondents suggested that confidence in key aspects of corporate reporting has fallen since the previous survey conducted in 2014. The biggest decline is seen in "confidence in degree of compliance." Only 55% say they are fully or somewhat confident, compared with 84% in 2014. Additionally, in 2014, 71% of respondents felt that corporate reporting was effective in securing the confidence of the board. Only 48% feel the same way today, as a result of increasing complexity, growing demand and resource pressures.