The buzzword FinTech, meaning financial technology, is a long-established category of financial operation and process optimization through the use of specialized software and algorithms. These new technologies help financial firms improve and automate the delivery of their services.
FinTech is multi-dimensional in scope and innovation. At its inception, FinTech only referred to the software
that was used in the back offices of financial institutions. But now, the wide reach of the internet and increase in the use of smartphones has allowed FinTech to expand into opportunities throughout the ranges of personal as well as commercial finance domains.
The scope of FinTech has now moved from mere financial transactions into other domains. FinTech tools now support fully remote bank accounts transactions as well as activities like applying for a loan or a credit card, or for managing your investments, making these activities dramatically easier and less time-consuming. According to a recent report, the adoption of FinTech services has grown to encompass 64% of financial institutions in 2019, compared to 33% during the study in 2017.
RegTech or regulatory technology helps financial firms mitigte risk by strengthening their regulatory compliance measures, and as such is a FinTech subset. These strengthened measures: reduce the fixed cost involved in compliance and increase both efficiency and customer protection.
Additionally, RegTech tools used for regulatory compliance capture a variety of data that can be used to provide valuable business insight. Since every business activity is being monitored for the purpose of ensuring compliance, the interests of customers can be easily identified, which helps companies provide faster and better customer service. This additional data capture also aids firms in promoting new services and products.
In the last decade, the burden of regulatory compliance on financial firms has increased drastically, particularly for firms with a global presence, functioning in multiple jurisdictions.
A recent study report predicts that 34% of all regulatory spending will be made on RegTech, by the year 2022. Compared to the 4.8% spending in 2017, this RegTech expense explosion is set to continue growing. Financial firms now spend around $270 billion annually to ensure compliance, which accounts for almost 10% of their operating costs. Based on a report from the Boston Consulting Group, giants in the banking sector have paid around $321 billion in penalties, since the financial crisis in 2018. The penalties arise from regulatory non-compliance issues such as: terrorist financing, money laundering, and market manipulation. Another estimation shows that financial firms have diverted 10-15% of their staff towards the management and governance of compliance programs in their firms.
Taking into account all the numbers mentioned above, we can see that the predicted surge of regulatory spending by the year 2022 is not an exaggeration.
Companies investing in RegTech can be broadly classified as follows:
- Defensive companies:Such companies are primarily focused on meeting requirements set by regulators, with a focus on the following regulatory changes: optimization of capital, reduction of conduct risks, and regulatory investigations.
- Progressive companies:With an aim to enhance customer experience and improve efficiency, these companies turn to process automation and commercial investments. Such companies also tend to work in close contact with vendor companies to improve customer experience in certain areas.
- Reinvention:Companies that focus on reinvention must employ senior managers and bring in unique ideas for the improvement of processes, transforming themselves into IP organizations.
Unrelated to the classifications defined above, compliance, cost and complexity are the three important factors that determine the adoption of RegTech within a firm. Adoption of the right tool depends on the proper balance of these three factors.
The Bank of England has urged the RegTech industry to promote cost-saving methods to automate compliance and spot money laundering activities, instead of putting expectations on the regulator to do so in a post-hoc analysis. The report issued by the City of London Corporation shows that the adoption of RegTech can bring down the compliance costs of Britain’s top five banks (combined) by at least £523 million pounds ($720 million).
Financial firms must take steps to incorporate RegTech into their business. While adopting RegTech firms must also focus on evolving from defensive mode to reinvention, so that firms can stay in front of the cost/technology curve.
With the increase in the use of mobile devices and personal devices in business, firms must resort to automated tools that can capture mobile calls and also capture mobile text messages. Instant messaging (IM) solutions like WhatsApp and WeChat are another area that companies must focus on when it comes to addressing regulatory compliance. TeleMessage, as a RegTech vendor, offers a wide variety of solutions that equip firms for performing activities like call monitoring, call archiving, text message monitoring, and text message archiving. When it comes to enterprise instant messaging, the tools offered by TeleMessage help in WhatsApp archiving, WeChat archiving, Signal archiving, and Telegram archiving.
About TeleMessage
TeleMessage captures and retains mobile content, including mobile SMS messages, voice calls, and WhatsApp and WeChat conversations from corporate or BYOD mobile phones to ensure compliance with various data protection regulations. The messages are securely and reliably retained within TeleMessage servers or forwarded to your archiving data storage vendor.
Our mobile archiving products securely record content from mobile carriers and mobile devices for various ownership models (BYOD, CYOD, and employer-issued). With our multiple archiving solutions, you can always find the right tools or blend for your requirements:
- Network Archiver
- Enterprise Number Archiver
- Android Archiver
- WhatsApp Archiver
- WeChat Archiver
- Signal Archiver
- Telegram Archiver
TeleMessage offers cross-carrier and international mobile text & calls archiving for corporate and BYOD phones. Visit our website at www.telemessage.com to learn more about our mobile archiving products.
