How is RegTech helping neobanks and fintechs simplify KYC and Compliance

Technology is driving at a rapid change in financial service with the latest development seen as a revolution rather than an evolution.

We all know about Fintech but there is a complementary player who goes hand in hand with financial services and that is; Regulatory Technology.

Regtech is considered a sub-segment of Fintech which is a technology solution that streamlines and improves the technology process. This is an example of an industry that is being changed rapidly by software.

Regtech is a contradiction of Regulatory and Technology combined. Till date, it has focused on the digitization of manual reporting and compliance process, for example in the context of knowing your customer (KYC)

The potential that it offers is that it streamlines and enables a close real-time and proportionate regulatory regime that identifies and addresses risk while also facilitating more efficient regulatory compliances.

What is the role of Regtech in Fintech and other convergence Platforms?

Parallelly developing both Regtech and Fintech is a necessity for evolution in this era, which present fresh challenges for regulators.

As a solution disrupts different parts of the Regtech ecosystem the digitization strategies of various institutions have started to take shape from the traditional focus on using basic software to automate manual repetitive processes.

Companies are more willing to experiment with delivery outcomes that meet the customer's expectations related to agility and customization.

The solution offered by Regtech can be integrated with existing IT infrastructure enabling relatively straightforward adoption.

For Example

Take the case of a consumer verification App that uses Artificial Intelligence(AI) and Machine Learning (ML) to reduce the time needed for verification which can be done Virtually.

Since data is the key input for new waves of a solution, the use of platforms, dashboard, analytics, ML and AI enables the insight to be delivered to different functional teams. These insights can be also be customized to benefit other applications such as customer engagement, marketing, new product and services thus creating more efficiency and productivity.

Let us come down to a point where KYC added value

Based on the Highlight shared on the Cost of Compliance 2017 firms are willing to find alternate ways to increase their regulatory Budgets.

Best examples Regtech which come to me is that of Thomas Reuters KYC as a service that is trying to help the financial institution to deal with compliance requirement

This KYC product helps in acceleration of on-boarding, helps in improving the experience of customer and delivery in cost-saving and simplification.

Regtech brings in the possibilities of introducing new capabilities that are designed to leverage the existing system and data to produce regulatory data and reporting in a cost-effective, flexible and timely manner without taking the risk of replacing any system thus enabling all neo banks, new fintech's to adapt to a more user experienced KYC system to banks and customers.