Three emerging technologies—fintech, regtech, and suptech—are entirely changing the banking and financial sectors.
These financial services solutions are different even though they are all connected and influential when utilized collectively. To make it easier for you to distinguish between them and understand how to use them successfully, we’ll look at their similarities and distinctions.
Fintech, regtech, and suptech are the three parts of a comprehensive risk and compliance program, and each has specific benefits and applications.
Fintech, regtech, and suptech are all significantly different from one another, even if they are related and occasionally hard to distinguish from one another. Here is a method to immediately tell the two apart:
The term “financial technology,” sometimes known as “fintech,” refers to any software or hardware utilized to deliver, maintain, and enhance financial services. The difference between regtech and fintech solutions is that the latter is simplified to make it simpler for risk and compliance teams to monitor complicated financial operations.
The Fintech industry, which is usually referred to as “Fintech” in a more generic sense, includes online financial services. Due to the term’s broad definition, items like bitcoin. Due to the term’s broad meaning, things like bitcoin Regtech products and compliance software are included in this software category.
By offering simple online services, fintech aims to deliver innovative technology that changes how clients engage with financial institutions. It directly competes with conventional banking and alters how people see both sectors. Because of this banking paradigm, customers can get financial services more quickly and efficiently.
Regtech, often known as “regulatory technology,” refers to goods that automate and regulate regulatory processes. These technological advancements improve risk management, streamline compliance-related procedures, and retain risk and compliance staff members up to date on legislative requirements.
Regtech, a subset of fintech, is concerned with monitoring, improving, and automating regulatory compliance activities inside a business. Regtech solutions have been created to help AML organizations manage and efficiently monitor regulatory processes. Regtech differs significantly from fintech because it facilitates administrative and regulatory processes such as data collection, data management, virtual assistance, and reporting. They are really near one another.
Fintech products may be offered to consumers, corporations, or both. When merging B2B and B2C use cases, fintech services may differ significantly in their offers or the market sector they focus on.
Supervisory technology” or “suptech” refers to software that improves, simplifies, or manages supervisory activities. It refers to the tools used by the financial services industry to keep track of and maintain regulatory compliance.
Suptech also referred to as “Regtech for supervisors,” was developed to help managers assess how well their companies follow regulations while keeping an eye on that objective. Financial institutions utilize Suptech and Regtech, which are still targeted at businesses, to check for rule compliance.
Suptech has resumed its previously irregular financial reporting, whether annually, monthly, weekly, or on any other basis. Supervisory technology reduces reporting intervals, enhances data granularity, and unifies data in a single spot to make analysis and review easier. The amount of data that regulatory organizations have access to and the rate at which they can digest it and act on it are both increased by all of this.
Suptech can notify oversight organizations as soon as new fraud strategies emerge. They could also discover more about the fraudsters’ activities, including how frequently they commit fraud, how profitable they are, and other information. Compared to other financial institutions, it has greater access to data, making it possible to identify fraud tendencies. The best practices may be distributed to businesses that might be vulnerable to the new dangers after they have been established to combat this new type of fraud.
An Effective Combination
These three seldom ever interact with one another. Regtech and Suptech are two types of technology that influence many companies, including the financial services industry. Therefore, it’s essential to consider how they interact.
Fintech refers to the technology used only in the financial services industry. In the financial services sector, Regtech and Suptech solutions are technically Fintech solutions, and vice versa for Fintech systems that perform regulatory or supervisory obligations.
Since financial services are subject to stringent regulation and inspection, Regtech and Suptech solutions are ideal for the Fintech sector; consequently, Fintechs like neobanks and cryptocurrency exchanges regularly use them.