RegTech is an answer to rising regulatory requirements. It’s striving to streamline regulatory processes with the usage of technology. Automatization of consulting processes and their new models that are now possible thanks to emerging technologies are also a part of RegTech.
This area is more and more important as costs of being compliant are steadily rising. Even regulators face the challenge to stay oriented in the fast-developing finance sector.
For every area of FinTech, we create a strategic table in which we identify incoming trends, key factors, challenges, and comparison of the state in the Czech Republic to other countries to provide companies an overview on how to implement the newest technologies.
|Incoming trends||Key factors||Challenges||Comparison to world|
|The compliance costs are steadily rising||Companies are spending large amounts of money to stay compliant. Banks pay on average 10 billion USD a year for regulatory fines||Regulatory changes are being introduced very fast, keeping up with the fast-developing financial market||It is in an active process in CR|
|Electronic KYC (eKYC), digitál identities||Allowing eKYCs even for use cases where they weren’t allowed before, accepting digital identities and electronic due diligence||This might not be permanent because it may be only a covid-19 measure||It is in an active process in CR|
|Supporting innovation initiatives, regulatory sandboxes, RegTech/SupTech a digital infrastructure||The covid-19 pandemic has made traditional regulatory actions such as visiting the company personally impossible||Digital infrastructure development is expensive||We haven’t noticed any similar activities were happening in CZ|
|Compliance will affect other areas than in the past||In recent years companies have been focused on regulatory obligations coming from directives such as MiFiD 2||Focusing on compliance monitoring, onboarding and KYC, AML, and CTF||It is in an active process in CR|
|The overregulation of many areas in the name of consumer protection (Is already happening but we expect it to continue even faster in the future)||Regulations in the areas of investing are payments are extensive. The documents can be as much as thousands of pages long||Not even regulators are capable of knowing the regulations precisely. The overregulation leads to complicated and extensive contracts that no one reads||The situation is identical in CR because we must implement EU regulations|
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