RegTech software refers to digital solutions designed to streamline compliance with regulations. These platforms are designed to automate regulatory processes, reduce compliance costs and minimise non-compliance risks.
Categories of RegTech software
- Compliance: Compliance software solutions ensure adherence to relevant regulations and policies. They often include real-time compliance tracking, policy management and audit trail features.
- Identity management: Identity management solutions assist in verifying client identities. They ensure compliance with Know Your Customer (KYC) practices and anti-money laundering policies. These solutions often include biometric and document authentication.
- Risk management: These RegTech solutions help organisations identify, analyse and mitigate risks associated with regulatory compliance, cybersecurity, financial transactions and company operations.
- Regulatory reporting: Regulatory reporting tools automate the process of preparing and submitting compliance reports to relevant authorities. They ensure accuracy and timeliness while mitigating human error risks.
- Transaction monitoring: These RegTech solutions monitor financial transactions in real-time, identifying and preventing fraud, money laundering and other unlawful activities. They help identify anomalies in transaction patterns and flag suspicious behaviour.
Which industries need RegTech software?
RegTech solutions encompass a wide range of industries, including:
Finance
Financial institutions, such as banks and investment firms, face the highest risk of illegal activity. These organisations must follow strict regulatory requirements to prevent crime. RegTech solutions help them comply with regulations such as MiFID II and MAR, as well as reducing the risks for insider trading and conflict of interest, for example.
Legal services
RegTech tools are constantly updated to ensure legal firms and their clients are always aligned with current legal standards. This minimises the risk of non-compliance penalties. For example, RegTech software can automate repetitive and error-prone tasks, such as insider list management.
Healthcare
Healthcare organisations must comply with strict regulations. RegTech solutions help these organisations ensure compliance with the General Data Protection Regulation (GDPR) and other EU-specific regulations. They can, for example, enable healthcare providers to accept anonymous whistleblowing reports, which can reduce the risk of non-compliance and heavy penalties.
Example use cases of RegTech software
Powering speak-up culture
Fostering a robust speak-up culture within organisations, while complying with the EU Whistleblowing Directive, poses a significant challenge. To complete their obligations organisations can use RegTech solutions such as whistleblower software IntegrityLog. It enables organisations to collect anonymous reports, provides real-time status updates of ongoing investigations and ensures whistleblower confidentiality.
Facilitating insider list management
The Market Abuse Regulation (MAR) imposes stringent requirements on organisations, demanding the creation and maintenance of insider lists that comply with precise standards. RegTech solutions such as insider list management software InsiderLog help organisations address these challenges. InsiderLog gathers relevant data on time, alerts insiders of their reporting duties and automatically saves lists in the correct ESMA format, minimising administrative work and the risk of human error.
Proactive personal account dealing (PAD)
Compliance with Personal Account Dealing (PAD) requirements, as mandated by MAR and MiFID II, presents organisations with multifaceted challenges. These include the need for vigilant monitoring of employee personal trades, rigorous maintenance of audit records, and the imperative for prompt reporting. RegTech solutions such as personal account dealing software TradeLog can help manage these compliance risks. TradeLog automates employee personal trade monitoring, simplifies audit records and reporting, and provides real-time violation attempt alerts.