New regulatory impact tools are being developed and tested in innovation hubs, such as the FCA’s Project Innovate. These safe zones for testing new software are using machine learning platforms and predictive analytics to develop new technologies. Project Innovate has developed co-working agreements with Singapore and Australia to test and bring to market new financial services technologies related to regulatory compliance. RegTech is the shortened term for regulatory technology – new software tools and AI algorithms which can monitor the changing global regulatory environment.
The new tools are being developed for agile, real-time monitoring, assessment, and compliance reporting of the changing global regulatory environment. With Brexit in the UK and the new changing government actions in the US, as well as the increasing global nature of financial services, regulatory compliance is becoming more complex and challenging.
Agile assessment means being able to rapidly respond to changes in regulatory compliance and reporting. Reg-Room LLC has developed a tool for rapid response to changing financial services regulatory requirements and compliance reporting. In some business models, such as Perficient, regulatory compliance is bundled with other services such as data and technology management across the business. Suade has developed RegTech that ensures continuous compliance for financial institutions, and also allows for cost-management analysis. FundApps is a new startup also producing a regulatory compliance software tool.
While the regulatory environment is becoming more complicated globally, these new software tools can help businesses quickly respond to changes. However, the most significant changes in the industry are going to be the ways in which machine learning platforms are able to conduct predictive analytics, including risk assessment, using large data sets. The new AI-based financial services tools are going to bring fundamental, structural changes to the way financial risk is measured and services are delivered globally. Innovation hubs and business incubators, such as FCA’s Project Innovate, are going to be ground-zero for testing and developing these new tools.
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