Regulatory Advisory Services Are Helping Fintechs Innovate

FinTech businesses must react quickly to growing and changing technologies. Their growth, innovation and survival, and ability to meet their customer's needs in a competitive industry depend on it

Regtech (regulatory-technology) and compliance

Quick expansion and improving technology have led to unprecedented growth. Continuous innovation also includes integrating new ideas that save time and are cyber-safe. However, although rapid innovation and growth are essential to staying current and up-to-date in the quickly evolving industry, the fluid nature of constant improvements requires remaining compliant with regulations, as the cost of non-compliance can be high and can lead to fines from regulators.

Most fintechs aim to move fast, welcoming mistakes as part of the innovation process. Moving slowly on advancing technology can lead to lagging behind competitors, which can be costly to retaining competitive advantage. Unlike traditional banks, fintechs can often lack robust risk and compliance management processes due to insufficient resources or in-house expertise. The nature of pace and potential vulnerabilities in the compliance of fintechs is attracting attention from regulators as they look to protect the industry from fraud and alleviate fintech security concerns.

Fintech companies must balance regulatory rules with innovation and growth. This balance is possible through regulatory advisory solutions, which can decrease risks and costs by supporting innovation and growth.

Striking the right balance between innovation and regulation

Companies must progress with the industry’s evolution and technology while adhering to financial restrictions. Blockchain, AI and other innovations are reshaping financial services. Financial institutions can revolutionise their compliance management with automated technology. Following the rules then further advances innovation and growth.

Most regulatory technology (RegTech) uses AI and machine learning, and these advancements promote innovation and progress. The cost of experimental technology and departmental communication improve, and innovation can be cultivated and legal needs met.

Sticking to stringent monitoring and rules

Regulatory advisory services use strict supervision to promote growth and new ideas. RegTech platforms leverage cutting-edge technology such as AI and Natural Language Processing, tools that are gaining popularity.

Businesses can learn how successfully they follow the rules utilising these technologies. Companies can identify and address hazards through compliance procedures. This means they’re less likely to break the rules and face a fine if they increase data insights into their processes.

Companies can utilise this data to improve daily operations. For example, businesses can boost their operating procedures to reduce operational risk. Digital involvement in the banking sector encourages businesses to attempt new innovations and solid processes, making these strategies more enticing, less costly, and lowering overall risk.

Boosting corporate value

Regulatory platforms can aid financial institutions if employed effectively. These platforms decrease expenses, increase compliance, and detect financial crimes. Eliminating manual processes and human bias in compliance management also squeezes the most out of budgets.

Technology can help organisations develop by utilising existing resources. Platforms can handle masses of internal and external data—these tools aid compliance duties like credit analysis and underwriting.

Digital technologies can affect how organisations handle workloads and labour strategies. Compliance platforms, for example, can help organisations move staff to more valuable tasks. Since simple compliance management tasks can be done automatically by the platform, companies can get more out of their financial compliance processes.

Improving internal communications

Departments and regulatory teams must work together to adhere to regulations. There isn’t always collaboration inside the organisation on managing compliance. This misstep causes delays, which can lead to fines and prevent progress.

However, utilising a tool that makes it easier for departments to work together can help regulatory teams. Specific tasks, like mapping for compliance, can be done automatically by regulatory advisory systems. Then, regulatory teams can understand each department’s jobs and give them to the right people.

Better departmental cooperation improves corporate functions, and fintech companies can improve operations, save money, and get more done.

RegTech will soon be crucial in regulatory processes as compliance duties are getting more complicated; it eases workloads, enables budgets to spread further and fosters growth.

About the Author: Rohini Gupta is the Director and Lead Regulatory Advisor at FinregE. Rohini started FinregE in 2018 and is the brains behind FinregE’s regulatory interpretation and compliance workflow solutions, which are designed based on her extensive hands-on experience and domain knowledge in regulation and compliance. Rohini has over 15 years of experience in many areas, including asset and wealth management, investment banking and retail banking, capital markets and financial services.