If you’re a business owner, you know that regulations can be a killer.
There’s a lot to keep track of, and it’s not always easy to stay on top of the regulations. This is especially true of small businesses. You just might not have the time or money to keep up with all the regulations.
As it so often does, technology is helping the situation. Using artificial intelligence, regtech is the next evolution of regulation management.
What is Regtech?
Regtech is short for regulation technology. Today, thanks to biometrics and artificial intelligence, it’s possible for companies to develop systems and apps that can help businesses comply with government regulations.
The idea behind regtech is that an outside company can use technology to monitor your systems and ensure that you are in regulatory compliance. This technology is of especial interest in the financial sector.
With regulations so widespread through the financial sector, it’s little surprise that banks, brokers, and others are trying to find solutions that reduce the bottom line.
But regtech won’t just benefit the big players in the financial sector. As the technology develops, there’s a good chance that business owners in a variety of industries can benefit.
Future Applications for Regtech
Right now, regtech is mostly focused on financial services. There are solutions providers that can help banks meet stress-test requirements or that monitor investor behavior for red flags that indicate trading problems.
In the future, though, it’s possible that regtech can also help in other areas. Any business owner knows that there are compliance issues when it comes to onboarding new workers, managing benefits, and performing any number of HR functions.
Keeping up with the changing regulatory environment can be challenging and costly. Regtech offers to help take some of the pressure off. You can use technology to track benefits and make sure that your payroll is in compliance.
It should also be possible to use the technology to stay on top of performance reviews and look for patterns of behavior that might be problematic. Armed with this information, you might be able to justify a firing, or catch a potential problem before it has time to develop.
Cost Reduction with the Help of Regtech
As with many technology solutions, regtech should be able to help you lower the bottom line. Financial services companies are already seeing benefits from emerging technologies that help them manage regulation and compliance.
If you are a small business owner, it can be costly to keep the right people on staff or on retainer to ensure your regulatory compliance. You could be spending a significant chunk of your budget on these activities.
With the help of regulation technology, you could automate some of these functions and save money. You would be more competitive because your costs would be smaller. That’s never a bad thing.
While there is definite promise for regtech, it is important to be careful. Startups are springing up everywhere. You need to carefully vet any solution to ensure that it won’t make things more difficult in terms of integration with your own processes.
And, of course, you need to make sure the regtech company actually can manage regulation and compliance issues.