A featured contribution from Leadership Perspectives: a curated forum reserved for leaders nominated by our subscribers and vetted by the Construction Tech Review Advisory Board.
International Head of E-Commerce/COO Serbia at Zepter InternationaI
RegTech - A Need or a Must?
We are all witnesses of the importance of technology and its development acceleration, with significant deliveries on an almost daily basis.
Even before the disturbance was created by the COVID-19 pandemic, technology was improving every aspect of our lives and will continue. To name a few, in 2021, 2,14 billion people bought something online, the number of global online banking users will exceed 3.6 billion by 2024, and driverless vehicles will navigate public streets. Such changes have the same pattern, and the information is being converted into digital form, causing a significant increase in accessible data, enabling users to classify, structure, and analyze it using artificial intelligence tools.
With the pandemic, in a very short time, the crisis showed the deficiencies of systems, sector after sector, that relied on old-fashioned procedures. Public health infrastructures, government agencies, and banks lagged behind the disease's escalation. As a result, there was a struggle to deliver rescue funding to businesses facing mass extinction, and people were suddenly facing unemployment. Almost overnight, office work, schoolwork, grocery shopping, and business conferences moved online.
Financial regulation is following this same path. Although it was moving toward digitization even before the pandemic, it was much slower than the private sector. Regulatory leaders around the world have been exploring where and how to modernize their systems to leverage digital data.
A growing community of regulatory innovators started forming. Initiatives from this community have been getting more and more attention from many government agencies. These days, the community grew up to the point that it has become integral in creating the financial ecosystem's future, making the ground for the regulatory technology better known as RegTech.
According to Deloitte, there are around 220 regulatory revisions to keep track of daily regulatory fines exceeding USD 345 billion since 2009, heavily increasing compliance costs and still rising. With all this, RegTech became a necessity.
Unlocking RegTech Financing for Prosper Development
A set of projects to prepare a sustainable development strategy for the modernization of a country has to have a fundamental aim to include a vision and priorities for the future development of the government through a broadly interactive and participatory process. By doing this, every country that opts for this transformation is coming closer to achieving one of the essential conditions for successful digitalization.
The Vision of RegTech
How do we catapult a country from its current status into this dynamic vision?
RegTech community is growing, more and more experts are eager to contribute, sharing the knowledge, experience and understanding the necessity for the change as a must
Every government is under considerable pressure to finance the necessary structural reforms, improvements in health and education, and reduce poverty. With traditional reforms for development under threat, it is crucial to invent new ways to provide for the socioeconomic development needs of the country's population. The World Bank defines innovative financing for development as "those [methods] that depart from traditional approaches to mobilizing development finance […] (World Bank 2009).”
Financial regulation is complex but not as complicated as connecting every computing device to a platform for immediate, interoperable communication and information access, meeting all the technical, legal, and social requirements. A significant change is possible when transformative technologies arise and when people cooperate to build interoperable frameworks that can put them widely to use.
RegTech community is growing, and more and more experts are eager to contribute, sharing the knowledge, experience, and understanding of the necessity for the change as a must. At the same time, government agencies are under tremendous pressure to provide now! These two sides will become one, and it's just a matter of time.
