The REGTECH Book

RegTech Applicability Outside the Financial Services Industry

By Robin Lee¹ and Sharifah Nursyafiqah Binte Syed Isha²

¹Market Development, Risk and RegTech, Refinitiv

²Senior Consultant, Datarama

Since its inception in 2016, RegTech has traditionally been associated with the financial industry due to compliance inefficiencies and challenges faced by this sector, which can be viewed as RegTech’s low-hanging fruit.

For example, the US Banking Secrecy Act stipulates that any transaction greater than US$10,000 needs to be flagged and reported to the Internal Revenue Service (IRS). The 10,000 number holds little ambiguity, so applying this to a RegTech application is very straightforward.

The types of regulations and ultimately compliance in the non-financial industry contain much more ambiguity. Therefore, we currently see very few RegTech companies focusing on this area. As technology progresses, we should see some interesting solutions emerge. We look forward to exploring this area further.

Non-financial Compliance

In today’s non-financial world, the role and background of a compliance officer is very different from that of a financial industry compliance officer. Non-financial compliance officers are typically lawyers (or ex-lawyers) and work very closely with the legal team, whereas in the financial industry compliance has moved away from legal risk and is more aligned with operational risk. As a result, there is less of a focus on areas like anti–money laundering (AML) and ...