Regulatory technology or regtech refers to technology that helps companies keep track of and adhere to their regulatory responsibilities. Regtech solutions have been growing more and more popular since the crash of 2008 caused the proliferation of new banking and finance regulations.
Many fintech companies must follow some of the same regulations as banks and other financial services providers, and some fintechs have actually applied for national bank charters and will be treated as banks for regulatory purposes. Fintech companies can use regtech solutions to manage workflows, reduce risk, manage regulatory change, handle onboarding, and more in such a way that it will generate consumer trust and strengthen companies. Here’s what the right regtech solution can do for your company.
Keep Things Organized
If regulatory agencies come knocking, you don’t want to find out that you missed some filing or misplaced the relevant paperwork or something like that. You want every document accounted for. You need a good regtech solution that can keep all of your filings in a central location so you have them to refer back to if necessary.
Manage Deadlines and Tasks
There are already a lot of regulations fintech companies have to adhere to, and plenty of deadlines related to them. Without the help of a regtech software solution, it could be easy to miss a deadline or a regulatory task. Regtech solutions keep track of upcoming deadlines and responsibilities for you so you’ll never miss anything.
Foster Consumer Trust
It can be hard to gain the trust of consumers as a new fintech company. People might be reluctant to put their faith, and their financial or personal information, into the hands of an untested startup.
Fulfilling your regulatory obligations shows consumers that you’re committed to protecting your interests and that you can be trusted to do business with. It’ll show that you value accountability. Let consumers know that you use regtech tools – it will boost their confidence to know that you’re taking your regulatory responsibilities seriously by using a tool that will improve your accuracy and keep your company on the right path.
Make Things More Efficient
Using regtech software to gather and analyze data and generate reports is going to be a lot faster and easier when you have a software tool to do all the work. Automating things like report generation will make regulatory compliance tasks easier and will allow team members to spend less time on those tasks, so they have more time to spend on other things and potentially so you can even get away with hiring fewer people to handle those tasks. Increases in efficiency will save your organization money as well as time, so you’ll have more capital to spend on the more important aspects of building your business.
Reduce Risks and Encourage Accountability
The right regtech tools can help you detect compliance risks and take action to address them before they draw increased scrutiny from regulators. Many kinds of risks can plague fintech companies, including legal threats, fraud, non-compliant trades, and market abuse. Regtech software can identify the risks threatening your company and help you eliminate them.
For example, you need to make sure that your marketing materials and advertising adheres to marketing guidelines set down by the Financial Industry Regulatory Authority (FINRA). Advertising for financial services must be fair and balanced, and not misleading, among other requirements. Regtech software can help you audit all of your marketing materials and advertisements in a streamlined way, so you can make sure that no mistakes appear in your advertising.
If you’re running a fintech company, you probably have a slew of financial industry regulations to worry about. It’s time to look into regtech solutions that can help your company manage regulatory requirements successfully. The right regtech solution will mean no missed deadlines, no lost records, and maximum accountability for individuals as well as entire teams, so you’ll have more time and money to devote to serving your customers.