What are RegTech and SupTech? Explore more about it

Updated On : Dec 2022

What is RegTech?

RegTech, also called regulatory technology, helps banks, credit unions, and financial institutions by using technological advancements in artificial intelligence (AI), data mining, blockchain, machine learning, and automation to optimize processes, solve problems, and manage risks for regulatory compliance.

A RegTech helps a regulatory body, the Reserve Bank of India (RBI), use the latest technology solutions to see if the financial institutions are meeting regulatory compliance.

Key Details:

• RegTech is the management of regulatory processes within the financial industry.

• Major functions are regulatory reporting, monitoring, and compliance.

• It is a group of companies that help financial institutions comply with regulations at lesser prices and more efficiently.

Role of RegTech in transforming the financial services: 

• Maintain compliance as per regulatory guidelines

• Simplified data management

• Real-time reporting

• Better insights for decision-making and data analysis

• New governance established and reframed regulations

• Risk and fraud control

Following are the technologies supporting RegTech solutions:

• Blockchain

• Machine learning

• Artificial Intelligence

• Cloud computing

• Data mining and analytics

• API

Benefits of using RegTech:

• Client onboarding time is reduced

• Helps in fraud identification.

• New regulations adopted faster

• Improved data collection and data analysis

RegTech Innovations for Financial Institutions (FI)

• Regulatory Sandbox:
  

  Sandbox is an innovation for customized reporting platforms. This enables decision-makers to make better-informed and calculated data-driven business decisions by providing instant access to business insights based on data. Sandbox helps to manage risks, increase efficiency, and reduce the time spent collecting data from the market. In the world, there are 20 regulatory sandboxes and 20 countries implementing or proposing a financial segment sandbox.

• RaaS (RegTech as a Service):
  

  RaaS helps financial institutions see RegTech as a path for improving processes for increasing efficiency and regulatory compliance.

Nelito’s Fincraft Enterprise Reporting Solution helps financial institutions to minimize and manage risks and helps in generating and submitting timely reports to RBI. It provides an end-to-end or stand-alone solution for Regulatory reporting (Automated Data Flow (ADF), XBRL), MIS Reporting, and Risk reporting. It helps to make timely, better-informed business decisions.

What is SupTech?

SupTech, or supervisor technology, is the technology used by the regulatory authority for monitoring and ensuring regulatory compliance by the regulated entities. The regulators receive data feeds directly from the institutions they are regulating. Earlier, they had to go out and collect data, then data feed into their systems and later analyze it using machine learning to identify suspicious activities like transactions or behaviors.

The two major initiatives being implemented by the Reserve Bank of India are the Centralized Information Management System (CIMS) and An Integrated Compliance Management and Tracking System (ICMTS).

SupTech initiatives are implemented between RBI and Supervisory Entities (SEs) for seamless reporting, enhancing data management, and data analytics capabilities.

Nelito offers customized solutions & services for its clients from finance and other sectors. To know more about it, write us at marketing@nelito.com or visit us here.