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9 Must-Know Tips for Choosing the Right RegTech Solution

9th January 2025

Writer's quote about the importance of choosing a RegTech provider wisely and carefully

9 Must-Know Tips for Choosing the Right RegTech Solution

Choosing a RegTech provider can be a hindering task as it’s often a process that demands careful research, consideration of business needs, software fit and ease of use. The key is to find a RegTech solution that is capable of addressing a financial service’s firm’s key compliance and regulatory issues all while delivering superior value and enhancing business opportunities.

The importance of having a strong compliance framework

Financial institutions recognise that having a strong compliance framework with robust software to support this is becoming essential to achieve sustained success. Moreover, firms know how complex and cumbersome the regulatory landscape is, particularly with watchdogs like the FCA and the PRA currently introducing new laws such as Consumer duty and Fair Value or updating existing ones like Solvency II. They recognise the only way for them to keep up is to adopt new technology that streamlines tedious manual compliance processes and instead enables 24/7 counterparty risk monitoring through data centralisation.

It’s crucial to note that the risk of non-compliance is not only costly, but is also reputational, with some insurers or financial firms at risk of entering a “Red List” of companies not to trade with. In fact, GlobalScape found that failing to comply has proven to be 2.71 times more expensive and associated with lost business opportunities.

So, what should companies consider when choosing a RegTech provider?

9 Best Tips for Choosing the Right RegTech Provider
9 Tips for Choosing the Right RegTech Provider

As the RegTech landscape continues to grow and innovate, spending on RegTech solutions is expected to surpass $130bn by 2025, a huge jump of 293% since 2020, according to a recent Juniper study. This clearly supports an accelerated digital revolution that has been propelled by COVID-19, but also by legacy processes that many financial businesses still use to carry out their due diligence and compliance tasks.

With 70% of insurance compliance professionals reporting a jump in the regulatory burden in the last year business can’t afford to ignore RegTech anymore. 

Below is our advice for choosing the perfect RegTech match:

1. Understand Your Most Important Needs

Before embarking on the journey of evaluating potential RegTech providers, It’s crucial to take the time to clearly define and articulate your organisation’s specific compliance requirements and challenges, but also overall business needs. This foundational understanding will serve as a guide helping you to select a software that aligns seamlessly with your long-term goals and objectives. By pinpointing areas where you face regulatory hurdles, you can better tailor your search for a solution that truly fits your unique context. The last thing you want is to be stuck with a RegTech provider that isn’t flexible or adaptable, and that doesn’t solve your most pressing pain points.

2. Evaluate Expertise and Sector Fit

When considering RegTech providers, prioritise those with a proven track record in the financial services or insurance sectors. Their extensive experience in these highly regulated industries will be invaluable not only in navigating complex industry-specific regulations but also in providing tailored solutions that address the unique challenges these sectors face. A provider with deep industry knowledge can offer insights and innovations that less experienced firms may lack. 

3. How scalable is your potential RegTech provider?

Scalability is a critical factor when evaluating RegTech providers, especially considering the evolving demands of compliance and distribution channel complexity. For financial services and insurance companies, managing risk and preventing fraud have become increasingly challenging due to the rising sophistication of financial crimes. The stakes are high, as the repercussions of non-compliance, whether financial or reputational, can be severe. Advanced technologies, such as AI and machine learning, now play a pivotal role in RegTech solutions. These tools analyse vast datasets to identify anomalies and patterns that may signal potential fraud or financial crime, supporting Anti-Money Laundering (AML) compliance and proactive risk mitigation. However, beyond technological capabilities, the scalability of a provider’s solution is equally important.

A scalable RegTech provider should be equipped to meet the most complex compliance requirements while seamlessly accommodating the growth of intricate distribution networks. Whether your organisation is managing multiple counterparties, expanding into new markets, or handling increasingly stringent regulatory demands, the ability of the RegTech platform to grow and adapt alongside your business is paramount. Selecting a provider that can scale effectively ensures that your compliance efforts remain robust, regardless of your operational or distributional complexities.

4. Support and Training Available

Thoroughly investigating the level of customer support offered by potential providers is essential for ensuring the smooth adoption of any new system. This includes evaluating training resources available for staff members who will be using the software regularly; comprehensive training not only eases initial transition but also fosters ongoing competence among users over time. Strong support mechanisms ensure that any technical issues are promptly addressed, allowing teams to focus on their core responsibilities and generating business rather than becoming swamped by compliance challenges. With the help of customer success teams, complicated features become easily grasped, ensuring compliance teams aren’t stuck using a solution without receiving adequate help.

5. Consider Preventive Power

How good is the RegTech solution you want to adopt at preventing AML or other types of financial fraud from happening? What types of data or sanctions lists you can have access to? These are some of the questions insurance and financial services leaders must ask themselves before settling with a provider. It’s crucial to consider a RegTech solution that has the necessary processes and technology in place to identify and mitigate compliance risks from happening in the first place. The goal is for firms to protect themselves against costly violations and reputational damage before it’s too late to go back.

6. Integration Capabilities

An important consideration when selecting RegTech solutions is their ability to seamlessly integrate with your existing systems and processes. Ensuring compatibility with current software minimises disruption during implementation while enhancing data flow across various platforms, which can lead to improved operational efficiency and more cohesive data management practices throughout the organisation.

7. Consider A Long-Term Partner

Selecting a RegTech provider with the right expertise to address long-term compliance needs is crucial. Insurance companies must ensure that the SaaS company they want to work with prioritises building an enduring partnership rather than a one-off service. With regulatory laws constantly evolving, ongoing collaboration is far more beneficial than a short-term approach. That’s why a subscription RegTech service is the go-to option since the main goal is to keep building strong long-lasting relationships, all while introducing new features that are built to enhance compliance tasks based on customer and market demands.

8. Cost Evaluation

When assessing different RegTech providers, carefully consider their pricing structures with an eye toward transparency regarding costs associated with implementation, maintenance, updates, and any additional fees that may arise down the line. Understanding these financial aspects upfront helps avoid unexpected expenses later on – enabling better budgeting decisions while ensuring you receive maximum value from your investment in compliance technology.

9. ESG And Culture Fit

ESG and culture are other crucial aspect that firms must research thoroughly before settling with a RegTech provider. In that sense, business leaders must ensure that their culture and the firm’s align to avoid any potential clashes. Most importantly, with regulators reinforcing controls over ESG rules and expectations, insurers must team up with a provider that has proper systems in place to carry out ESG due diligence checks successfully. This plays a significant role in enabling companies to trade with like-minded businesses that value sustainability and corporate social responsibility.

Victoria Slade head of sales at REG Technologies

“Whilst each business I speak with will have different needs, their pain points are often very similar. When exploring RegTech for the first time, it is critical that the solution is relevant for the sector they’re working in: what might be appropriate for a banking firm vs. insurance may be starkly different.

It is also valuable not to focus simply on cost and consider the benefits more broadly, whether that be process, cost avoidance or customer service levels. This becomes especially important if different providers are providing different benefits, such as a document management facility as the efficiency gains can be significant.”

Resons why REG Technologies is the go to RegTech partner in the insurance sector
Why REG Technologies is the Go-To RegTech Partner?

With our revolutionary subscription solutions, regulatory expertise and a dedicated customer success team, REG Technologies is well positioned to simplify insurance and financial services firms’ compliance and due diligence processes.

From the REG Network, which puts businesses in total control over their risks and enables them to monitor their connections 24/7, to REG Exchanges, an innovative solution that is facilitating document exchange and sharing across the entire distribution chain, we have developed a full cycle management software capable of centralising and integrating data seamlessly, allowing you to focus on making important business decisions to maximise revenue.

With REG Technologies, there is no more relying on manual processes and legacy systems to conduct due diligence and compliance checks.

Choosing a long-term RegTech partner is crucial
Wrapping Up ...

At REG Technologies, we revolutionise compliance and due diligence for insurance and financial services firms through our subscription-based solutions, regulatory expertise, and a dedicated customer success team. Our platform is designed to simplify every stage of compliance management, from onboarding to continuous counterparty risk monitoring. The REG Network empowers businesses to take complete control of their risks, offering 24/7 monitoring of counterparties and connections. Meanwhile, REG Exchanges facilitates seamless document sharing and collaboration across the entire distribution chain, enabling streamlined communication and enhanced operational efficiency.

By integrating these capabilities into a full-cycle management solution, REG Technologies centralizes and automates data handling, allowing firms to replace manual processes and outdated systems with a modern, scalable platform. This means you can focus on making strategic business decisions that drive growth and maximize revenue while staying ahead of regulatory requirements.

With REG Technologies, you’re equipped with a comprehensive compliance solution that evolves with your business needs.

Speak to one of our experts to learn how REG Technologies can help you.

This article was published by:

Article author:

Niamh Doyle

Niamh Doyle is a Customer Success Manager at REG Technologies. Niamh is dedicated to being the port of call for all customers to help their business run Faster, Smarter and Safer.

020 3946 2880

info@reg.uk.com

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