Marc Gilman is General Counsel and VP of Compliance at Theta Lake. He is also an Accessory Professor at Fordham University School of Law.
Innovation has actually been utilized to handle regulatory threat considering that the advent of the ledger book (or the Bloomberg terminal, depending upon your reference point). Nevertheless, the cost-consciousness internalized by banks during the 2008 financial crisis combined with more robust techniques of evaluating big datasets has spurred development and increased efficiency by automating jobs that formerly needed manual reviews and other labor-intensive efforts.
So even if RegTech wasn’t born during the monetary crisis, it was most likely old enough to drive an automobile by2008 The intervening 11 years have seen RegTech’s scope and influence grow.
RegTech startups targeting monetary services, or FinServ for short, require very different growth techniques– even compared to other business software companies. From a practical perspective, whatever from the security requirements influencing software application architecture and development to the sales process are considerably different for FinServ RegTechs.
The most effective RegTechs are those that draw on expertise from security-minded engineers, FinServ-savvy sales personnel in addition to legal and compliance experts from the industry. FinServ RegTechs have emerged in a variety of areas due to the increasing instructions originating from financial regulators.
This brand-new crop of startups performs advanced background checks and transaction monitoring for anti-money laundering purposes pursuant to the Bank Secrecy Act, the Office of Foreign Possession Control (OFAC) and FINRA rules; tracks supervision requirements and retention for electronic communications under FINRA, SEC, and CFTC guidelines; as well as displays info security and personal privacy laws from the EU, SEC, and numerous US state regulators such as the New York Department of Financial Provider (” NYDFS”).
In this article, we’ll examine RegTech startups in these 3 fields to figure out how options have been structured to satisfy regulatory demand along with some of the functional and regulative challenges they deal with.