December 20198 IN MY V EWRegTech (regulatory technology) is sometimes referred to as the sibling of FinTech. It involves the use of applications on technologies (such as cloud computing and big data) that help companies meet their compliance and regulatory requirements, and regulators monitor and enforce their regulations. Compliance is vital to the success of firms, and whilst it is not considered a revenue-generating function, there are costs associated with non-compliance including fines, reputational costs, resource, and advisor fees. The regulatory environment is becoming ever more complex, with around 300 million pages of regulatory documents expected to be published by 2020, posing challenges to firms' compliance departments and their ability to navigate the regulatory landscape. Between 2008-2016, there was a 500 percent increase in regulatory changes in developed markets, highlighting the need for scalable, reliable, and efficient RegTech solutions. As firms seek to reduce compliance burdens and avoid regulatory fines, research by Juniper Research found that over the next few years RegTech spend will grow by 48 percent per annum--rising from $10.6 billion in 2017 to $76.3 billion in 2022. Though RegTech clearly brings benefits for a number of areas, including onboarding, monitoring, detection, and reporting many regulated firms have yet to implement RegTech solutions throughout their institutions. The reasons are manifold, including risks associated with use of new technologies, integration issues with a firms' legacy systems (although many RegTech firms recognise this challenge and where feasible try to adapt accordingly) and support by senior executives to invest in RegTech solutions given the numerous other costs that firms face. Lastly, one may instinctively question why an unregulated company is a key factor in compliance for a regulated firm.Regulators globally are also supporting the development and uptake of RegTech solutions, as demonstrated by their creation or sponsorship of various RegTech initiatives, sandboxes, and accelerator programs including the Financial Conduct Authority's and Bank of England's Digital Regulatory Reporting (DRR) initiative, TechSprints, and the RegTech for Regulators accelerator. REGTECH COLLABORATION: MAKING THE FUTURE OF INNOVATIVE COMPLIANCE A REALITYNicole SandlerBY NICOLE SANDLER, INNOVATION POLICY LEAD, REGULATORY POLICY BARCLAYS (LSE: BARC)
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