The REGTECH Book

Islamic RegTech

By Niclas Nilson¹ and Inga Jovanovic²

¹Founder and CEO, Capnovum

²Managing Director, Capnovum

RegTech is battling large volumes of structured and unstructured information from dispersed regulators and supervisors. Frequently revised regulatory frameworks and compliance milestones add further complexity to already overlapping and sometimes contradicting requirements.

The volume of regulations and regulatory change already exceeds what can reasonably be processed without cognitive solutions. Reacting late results in duplication of effort, further cost, compliance risk, and ultimately sanctions. The rising cost of doing business has driven demand for advanced RegTech solutions that deal independently with discovery, understanding, and monitoring of regulations and obligations.

The similarities to the challenges faced by Islamic financial institutions are striking. Islamic finance has struggled with intersecting and often conflicting regulations and religious rulings since long before regulators went into overdrive in the wake of the financial crisis. RegTech solutions developed to meet global regulatory requirements therefore come with distinct benefits to Islamic financial institutions.

RegTech and artificial intelligence offer synergies for Islamic institutions by bringing together religious rulings with conventional regulatory frameworks, identifying associated obligations across regulations and jurisdictions. The additional transparency contributes to economies ...