Demonstrating compliance cited as key driver as research explores reasons for implementing RegTech
The need to demonstrate regulatory compliance is the one of the top reasons why businesses look to implement RegTech solutions, according to new research.
Encompass questioned global technology leaders across a range of sectors on the drivers for turning to the latest solutions to power their processes, with insights including:
- 51% highlighted the importance of demonstrating compliance when deciding to implement software
- 49% of respondents said automating manual processes was a priority when bringing on RegTech
- 49% listed ‘reducing risk exposure’ as a reason for their business enlisting RegTech solutions
- 42% said RegTech they have invested in RegTech in order to support the future growth of their business
These findings come at a time when digital transformation initiatives have accelerated for many, as the repercussions of the COVID-19 pandemic have led to businesses evaluating their focus and practices. This was underlined in another recent survey, from research and insights community Pulse, which focused on digital transformation priorities for 2021.
Looking at Q2 particularly, respondents said digital transformation remained a crucial area for them, with budgets increasing across the board to support efforts. Evaluating their organization’s digital maturity now compared to 12 months ago, more than half said it had ‘moderately’ improved, while 87% of technology leaders agreed that these initiatives were top of their agenda for the coming months.
In the case of RegTech specifically, we know that businesses are looking for solutions that will support them as the world continues to transition into the ‘new normal’. As a result, interest and investment in the sector is experiencing an upward trend. According to a recent KPMG report,“interest in regtech solutions skyrocketed as companies working to digitize processes quickly to support shifting business and consumer demands looked for efficient and cost-effective ways to manage their regulatory requirements in a shifted business environment.”
Commenting on these survey findings and what they tell us about the drivers for RegTech adoption, Encompass CEO and co-founder, Wayne Johnson, said:
These results should not come as a surprise. The pandemic has driven an increased demand for automation to streamline processes and improve controls, particularly given the continued challenges to navigate around home working.
Currently, 80% of Know Your Customer (KYC) processes are manual, and therefore unauditable. Organizations spend an estimated $8bn a year performing these mandatory tasks, yet most cannot demonstrate that the processes in place have been followed. As they work to transform how they operate, RegTech will continue to be key. Automation not only boosts the efficiency, effectiveness and auditability of processes, but it also offers a more economical and adaptive answer to complying with new obligations and tackling financial crime.