The REGTECH Book

7RegTech from a Regulatory Perspective

As mentioned at the start of the book, the RegTech industry has a diverse client base. While regulators are key actors in the promotion of this sector; they are increasingly direct consumers of these solutions as well. The following chapters will provide more detail on this trend.

This demand is the result of factors which each have their market and geographical specificities. While the UK has been at the forefront of RegTech development and Europe generally has been progressive regarding innovating regulatory reforms, growth in emerging markets has a different origin.

One such example is the R2A accelerator, a non-profit accelerator program co-sponsored by three central banks, each seeking to improve their supervisory capacity using technology. Regulators in emerging markets are facing a double challenge. Similarly to their Western counterparts, regulators often have resource constraints for market supervision, which in effect translates to limited if not limiting workforce capacity to properly oversee authorized financial institutions. Here RegTech solutions not only provide efficiency gains but become tools for more comprehensive supervisory capacity.

What is more, regulators in emerging markets are in the middle of a massive expansion in financial inclusion. While positive at a societal and economic level, the increasing number ...