Businesses operating within regulated industries face continually evolving challenges, from their regulatory and legal responsibilities to progressively competitive commercial tests. In the drive to remain competitive, businesses are increasingly turning to technology solutions for a range of operational areas and not just product distribution.
Generally, the terms that most people will be familiar with for these technology solutions are InsurTech (Insurance Technology) and FinTech (Financial Technology), but there is an increasing focus on relative newcomer RegTech (Regulatory Technology). Simply put, all these acronyms refer to the concept of using software and technology to deliver seismic efficiency gains in a business process or area of operation.
Recently, Deloitte calculated there are around 200 regulatory revisions made globally every day, with regulators handing out fines in excess of $300bn between 2008 and 2017. RegTech is increasingly becoming the ‘must have’ solution to ensuring continued compliance within a manageable cost base.
RegTech has steadily established itself as an effective solution for driving operational efficiencies and facilitating business transactions between counterparties. In the insurance market RegTech has become an integral tool for firms to undertake due diligence and oversight of their trading counterparties and forms the bedrock of a robust governance and control framework.
RegTech solutions have also transformed the offer, acceptance and exchange of contract documentation. Following hot on the heels of the Insurance Consumers Act, Insurance Act and Enterprise Act came the implementation of GDPR, the Insurance Distribution Directive and Senior Managers Certification Regime forcing many participants to ‘re-paper’ their contracts with trading partners.
Replacing ‘not for purpose’ spreadsheets and emails, RegTech has provided cloud based utilities that deliver document exchange tools utilising block chain concepts, enabling adopters to stay ahead of the game.
Ultimately regulation is here to stay. RegTech solutions are a logical generator of efficiencies and cost savings for regulated firms.
Good businesses have always been based on solid processes. RegTech doesn’t change this, but simply increases the opportunity to deliver excellence, faster, affordably and frequently.
So, don’t fear the technical innovations that are making this happen. Think of RegTech as simply delivering ‘A Better Way’.