By Désirée Klingler
Attorney-at-Law and PhD Candidate, University of St. Gallen
The Rise of RegTech
RegTech vs FinTech
Regulatory innovation or the innovative use of regulatory technology − in other words RegTech − is a relatively new phenomenon that has emerged in the wake of 2016. Some authors understand RegTech as a logical continuation of FinTech. I see it as a phenomenon with a broader scope.
It is my claim that RegTech is not merely “a new domain within the financial industry”1 but goes beyond. Rather than being limited to the application to the financial market, RegTech can be used in other regulation-intense industries like the health care sector or in public procurement. Due to its vast field of application and the large number of regulations, RegTech even holds the potential to outpace the velocity and scope of FinTech. Nevertheless, today’s most prominent use cases of RegTech have emerged in the financial sector − this is why this article will focus on this matter.
Furthermore, I argue that RegTech is more than simply applying new information technologies like natural language processing (NLP), deep learning or data mining to make regulatory processes more efficient. It does more than just offer an innovative approach for the regulator to more efficiently and effectively oversee regulated institutions. RegTech has the potential to create new business models and eventually also a new area of law − as discussed ...