RegTech Opportunities in a Post‐ 4MLD/5MLD World
Nicola Cowburn, Patrick Barnet · 2019
RegTech solutions enable data to be collated, sifted, manipulated, and stored securely; they are often cloud-based and can be adapted quickly when regulations change, as well as offering the speed and efficiency that legacy systems cannot provide. Regulators have welcomed the entry of RegTech companies to the market and are encouraging regulated firms to engage with them and take advantage of their potential to deliver regulatory compliance in a shorter timeframe and at far lower cost. The core principles underpinning 4th EU Money Laundering Directive and Fifth Anti-Money Laundering Directive are not new: they emphasize a move away from a tick-box approach in favour of the risk-based approach, which is now the cornerstone of compliance in this field. A more enhanced understanding of a customer by a bank or financial services firm also has knock-on benefits of cross-selling, better customer financial management, and less pestering of customers for refreshed ID documents.