Blogs
12th March 2025
Regulatory technology (RegTech) is shaping the future of compliance in insurance, with recent discussions highlighting the increasing likelihood of more robust tech processes becoming a regulatory requirement. During a recent REG and Insurance Post webinar, industry experts emphasised the need for advanced digital solutions to keep pace with evolving regulations. As the regulatory landscape continues to evolve, RegTech is proving itself not just useful, but essential for insurance companies navigating complex compliance challenges. These advanced tools streamline processes and enhance precision, making them strategic assets for the future to drive long-term resilience, efficiency, and regulatory confidence.
The RegTech landscape is set for some exciting changes in the near future. With every new regulation and technological advancement, we can expect to see a shift in how compliance is managed. Whether it’s through mandated use or natural adoption, the next few years are likely to bring about innovative developments that could reshape the insurance industry as we know it.
The onset of the COVID-19 pandemic marked a pivotal moment for technological adoption, acting as a catalyst that accelerated the shift towards more robust digital processes. As traditional office settings gave way to remote operations, the insurance sector, along with many others faced a range of new challenges that tested their compliance frameworks like never before. RegTech has stood out as a critical solution, facilitating seamless transitions to digital platforms and enabling firms to enhance their compliance processes efficiently and effectively.
Building on the initial momentum provided by the COVID-19 pandemic, and the changes that have already come into play since, the anticipation is growing that regulatory bodies like the Financial Conduct Authority (FCA) may soon mandate the use of RegTech or other technologies to contend with compliance pressures.
This regulatory shift aims to primarily minimise human error, a prevalent risk in compliance, and to enhance the overall efficacy of regulatory processes. Reflecting on the pandemic’s impact, Victoria Slade, REG’s Head of Sales, in a recent Insurance Post webinar emphasised, “in the hangover of COVID, we’ve definitely seen a marked increase in the willingness to explore RegTech.” Her observation underscores a broader recognition of RegTech’s indispensable role in today’s regulatory environment, where traditional compliance methods struggle to keep up with market and regulatory evolutions.
The potential for regulatory mandates arrives in the midst of an increasing regulatory burden. As firms struggle with managing larger data volumes and adhering to more complex regulations, the absence of advanced technological tools can place them at a significant competitive disadvantage.
REG’s Marketing Manager, Zoë Parsons, also warned “players that don’t arm themselves with the best tools risk literally just falling behind.” This statement highlights the critical need for firms to adopt Regtech solutions- not only to comply with current regulations but also to prepare for a future where such technologies might become compulsory.
At the recent webinar hosted by the Insurance Post, “Easing the Regulatory Burden to Allow Insurers and MGAs to Prosper,” Victoria Slade shared her insights on the potential future of RegTech and suggested the idea of the use of technology becoming mandated. Looking ahead, it is conceivable that the FCA and other regulatory bodies might establish specific guidelines or frameworks for the integration of RegTech within operational and compliance protocols. Such measures would ensure that firms are not merely adopting technology for the sake of modernisation but are effectively utilising these tools to mitigate risks associated with non-compliance and human errors.
As we anticipate more structured mandates from regulatory bodies like the FCA for the adoption of RegTech, it is also likely that these authorities will begin to enforce stricter regulations on the service providers themselves. This move would aim to ensure that the technology provided is not only effective but also secure and reliable, protecting both the firms and their clients.
Given the critical nature of compliance, service providers will be expected to meet high standards of accountability and performance. The FCA, known for its rigorous oversight, would likely implement a framework to certify and monitor RegTech solutions, ensuring they deliver on their promises without introducing new risks into the financial system. Such regulation would not only solidify the trust in these technologies but also stabilise the RegTech market by setting clear benchmarks for quality and security.
RegTech is not just transforming compliance processes; it is also reshaping the competitive landscape for firms of all sizes within the insurance industry. The challenges and opportunities it presents vary significantly between smaller firms and larger corporations.
Challenges and Opportunities for Smaller Firms:
Smaller firms often face significant hurdles in the regulatory landscape due to limited resources. Without RegTech, these companies might struggle to keep up with the pace of regulatory changes and the complexity of compliance requirements. The lack of advanced tools can lead to inefficiencies, higher costs of compliance, and a greater risk of non-compliance, which can result in large fines and reputational damage.
However, the adoption of RegTech also offers substantial opportunities for smaller firms. It can level the playing field, allowing companies to automate compliance tasks that would otherwise require a disproportionate amount of resources to manage manually. RegTech can streamline processes such as reporting, risk management, and customer due diligence, reducing the burden on limited staff and helping smaller firms operate more efficiently and effectively within the regulatory framework.
Challenges and Opportunities for Larger Firms:
For larger firms, RegTech is used not just for compliance, but as a strategic asset that provides a competitive advantage. These firms often have the capital to invest in more sophisticated RegTech solutions, which can integrate with existing systems to enhance data analytics and risk assessment capabilities. This integration allows larger firms to process large volumes of data swiftly, detect compliance and operational risks earlier, and respond more rapidly to regulatory changes.
Larger firms also use RegTech to improve their customer service by ensuring faster and more accurate compliance processes, which enhances the overall customer experience. Additionally, by maintaining high standards of compliance, large firms can avoid the significant penalties for non-compliance that might impair smaller competitors.
Looking Ahead:
As regulatory bodies possibly tighten controls around RegTech solutions, both small and large firms will need to navigate these changes. For smaller firms, the challenge will be to adopt and integrate these technologies without overwhelming their budgets. For larger firms, the challenge lies in leveraging their RegTech investments to maximise efficiency and maintain a competitive edge in an increasingly regulated world.
The discussion around RegTech and its development is shifting from ‘if’ to ‘when’. As regulations grow tighter and more complex, the ability to adapt quickly and effectively will become even more essential to all business operations. As the complexity of regulations increase, firms that continue to rely on traditional methods may find themselves struggling to keep up.
Is RegTech currently a part of your strategic planning? If not, it might be time to start. Book a demo with one of our experts to find out how we can help you improve your processes.
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.
In an industry where success hinges on strong relationships, insurance and financial services companies must prioritise integrity, trust, and diligence when forging new business relationships. However, navigating the intricacies of regulatory and statutory obligations often creates obstacles for these relationships from the start. The complexities of regulatory adherence have been cited to impede regulated firms’ abilities to effectively initiate new partnerships; hindering growth and stifling innovation. Now, with the growing emergence of RegTech, businesses can streamline compliance processes and accelerate trade partner onboarding, ultimately setting them up for sustained success...
In today's rapidly evolving business landscape, regulatory compliance has become a significant challenge for financial institutions and other regulated industries. The ever-changing and complex regulatory requirements place a heavy burden on organisations, leading to increased costs, resource allocation, and operational inefficiencies. However, a silver lining appears through the rise of compliance software, which serves as an innovative solution to manage the abundance of regulatory requirements...
As the regulatory landscape continues to tighten its grip on the insurance industry, on 30th January 2025, industry leaders gathered for a live webinar hosted by Insurance Post in association with REG Technologies to tackle how insurers and MGAs can navigate these challenges while remaining competitive. The panel featured leading industry voices, including Zoë Parsons and Victoria Slade, Marketing Manager and Head of Sales from REG Technologies; alongside Steven Folkard, Chief Risk and Compliance Officer at Jensten Group and Richard Turnball, Managing Director at Collegiate Underwriting, who explored the increasing burden of compliance and the potential of technology to transform the way firms operate.
Anti-money laundering (AML) standards are more than regulatory requirements; they are vital safeguards for the insurance sector. AML policies are critical in preventing the infiltration of illegitimate funds and requires rigorous monitoring and reporting of financial transactions. In the insurance industry, the complexity of transactions and the global scope of operations introduce significant risks, making AML compliance not only a regulatory must but a central component of business practices...
