The REGTECH Book

The Future of RegTech

By John Humphries¹ and Daniel Flax²

¹CEO, Risk Priorities Inc

²Co-Founder, Piece of Cake Consulting

A Big Opportunity

A number of factors have helped to shape the current global regulatory environment. With the onset of the global financial crisis (GFC), banks saw a dramatic increase in regulatory scrutiny and oversight, which will remain. As some companies failed to keep pace with regulatory requirements in certain countries, this resulted in fines, penalties, and settlements exceeding hundreds of billions of dollars since the start of the GFC. Many of these fines are the result of complex regulatory issues, which banks have fixed or are in the process of remediating. These regulatory issues can often be challenging, span multiple countries, and be time-consuming and costly to remediate. In addition to fines, financial services companies are spending billions of dollars on compliance costs annually.

To complicate matters, recent compliance surveys and conversations with employees at financial services companies have highlighted concerns over personal liability and individual accountability. In particular, the C-suite and employees in the compliance, regulatory affairs, operational risk, and audit departments often feel first-hand the pressure and impact of an organization’s regulatory breaches and failure to comply with regulations.

The culmination of these factors has caused banks to invest substantially to remediate existing regulatory issues, to keep ...