Page 26 - Insurance Times November 2023

Importance of

RegTech for

Fintech &

Sanjay Singh
Insurtech MBA (Ins), Fellow-III , DCII(London)

Senior Manager- Underwriting
Shriram General Insurance Co Ltd

RegTech (regulatory technology) is a class of software applications for managing regulatory
compliance. Companies invest in RegTech as a way to save time and money, allowing resources
that were once devoted to regulatory compliance to be diverted elsewhere, once RegTech takes
over those functionalities.

Introduction: Functions of Regtech in Finance sector:
The term "RegTech" is formed using the combination of the Regtech companies use technology to automate compliance
words "regulatory technology". It refers to the use of any processes, such as customer due diligence (CDD), risk
modern technology, such as software or cloud-based assessments, and transaction monitoring, which helps
solutions which are used by financial institutions for better financial institutions to detect suspicious activities and
compliance with regulatory requirements. RegTech is a prevent financial crimes. A regtech firm can combine
recent concept in the Indian Fintech and Insurtech industry. complex information from a bank with data from previous
The fintech and the Insurtech industry is quite dynamic and regulatory failures to predict potential risk areas that the
with the ever-changing regulatory landscape, it can be bank should focus on. By creating the analytics tools needed
challenging for financial institutions including Insurance to for these banks to successfully comply with the regulatory
keep up with the latest regulations. RegTech is the body, the regtech firm saves the bank time and money.
management of regulatory processes within the financial
industry. The main functions of regtech include regulatory One of the main objectives of the RegTech industry is to
monitoring, reporting, and compliance. It consists of a group provide technology-driven solutions to compliance
of companies that help businesses comply with regulations challenges. This includes conducting in-house compliance
efficiently and less expensively. processes, audits, and risk workflows in real-time. RegTech
solutions can help financial institutions stay up-to-date with
RegTech (regulatory technology) is a class of software changing regulations and avoid fines and other penalties for
applications for managing regulatory compliance. non-compliance. They can also reduce the cost and
Companies invest in RegTech as a way to save time and complexity of compliance and free up resources for other
money, allowing resources that were once devoted to business activities.
regulatory compliance to be diverted elsewhere, once Tools of functioning for Regtech
RegTech takes over those functionalities. Regtech tools
monitor online transactions that take place in real-time to Companies:
identify irregularities or issues in the digital payment sphere. RegTech companies are now engaging machine learning,
Any outlier is sent to the fintech company to analyse if natural language processing, block chain, AI, and other
fraudulent activity is taking place. technologies in order to bring the power of digital

The Insurance Times November 2023 25