Regtech & Suptech: Digital Backup of Business Compliance and State Surveillance

State regulations on financial reporting, sustainability, and data protection become more strict year by year. Companies find it difficult to keep up with regular updates in legislation and set up all business processes in a new way. Deloitte discovered that in 2020 regulatory fines exceeding $345 billion have been issued since 2009. Today is the end of 2022, and this number has become much bigger.

Meanwhile, dynamic legislation is also a challenge for public authorities because they must be aware of everything and work under the law regardless of how often it is changed.

But, a crisis is always the main engine of progress. Therefore public and private sectors opted for regtech and suptech solutions usage. Most likely, these buzzwords don’t speak to you now, but we’re here to fix it.

Scroll down to explore how regtech and suptech allow businesses and state regulators to make lemonade from a lemon, in what way it supports their development and whether this approach has a future.

Regtech: regulatory monitoring, reporting

Regulatory technology or regtech is created for businesses to boost their compliance, monitoring, reporting, and regulatory processes and properly interact with state regulators, delivering only accurate data.

The technology allows companies to gather all the updates under one roof and tailor to the new reality, avoiding:

• regulation-related risks

• costly compliance procedures

• time-consuming tracking of amendments in legislation

Regtech is really demanded in areas where actual development is ahead of state regulations. Therefore, this approach is mainly used by the finance industry representatives: traditional banks and neobanks, credit unions, and cryptocurrency exchanges. However, frequent updates of data protection acts, “green” legislation, etc. create room for broad usage in various domains, from retail and telecom to construction and mining.

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Consequently, regtech is needed to help businesses handle everything regulated by a state: from KYC procedures to real-time monitoring of compliance levels. It helps create accurate reporting, respond to risks before they arise, and build a robust anti-fraud software ecosystem. Despite its broad functionality, this approach also requires maturity from enterprises. Regtech is supported by cutting-edge technologies, such as:

• cloud computing

• blockchain

• Big Data

• machine learning

• predictive analysis

• smart contracts

It means that even ready-to-use solutions can work properly only in an appropriate business environment with flexible processes and an active digital transformation journey.

Source: Deloitte

Suptech: supervisory and oversight

Suptech or supervisory technology is a magic wand for state authorities, helping them control the fulfillment of regulatory requirements and keep the amendments in legislation on the radar.

Regulation bodies also need to cope with a significant volume of data providing the same high level of its protection as businesses. Suptech is a set of tools that helps them to:

• automate manual procedures

• eliminate risks of human mistakes and fraud

• improve overall efficiency

• predict issues before they arise

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Since the public sector always needs to catch up with businesses regarding modernization or digital transformation, suptech here is the way to be on the same page. Consequently, this technology brings to the conservative state regulators innovations such as electronic document flow, intelligent data analysis, and processing system, etc.

State authorities usually use suptech solutions to ensure proper supervision and performance of the following processes:

• regulatory reporting

• market monitoring

• platform and database integration

• real-time compliance supervision

• ​​data management

Source: World Bank

Consequently, the suptech usage practice, like the regtech one, might migrate to state authorities monitoring business activities in various areas. The only thing is that regtech and suptech should always be connected to provide dual efficiency to each involved stakeholder.

If you are looking for a way to build a mature software basis for further regtech or suptech implementation - contact our sales team. Discover what starting point will be suitable for your conditions.