Integrating Regulatory Technology (RegTech) into the digital transformation of a bank Treasury

Abstract

The volume and complexity of financial regulations have increased significantly since the 2008 financial crisis. This has put increasing pressure on banks to monitor and report a range of intricate exposures to comply with new prudential requirements. Regulatory Technology (RegTech) is an emerging technology trend leveraging Information Technology and Digital Innovations that can greatly assist with a bank’s regulatory management process. A consideration is that these technologies can sometimes be expensive and inefficient if deployed on an ad hoc and stand-alone basis. An option is to incorporate RegTech into the digital transformation strategy of a management function such as Treasury. Integrated adoption would mean the digital platform can be deployed to support both strategic management activities and enhanced regulatory processes within Treasury, thereby ensuring commercial and prudential objectives are aligned. RegTech can provide an invaluable tool, in a business-as-usual environment, as well as in real-life stress events, such as the recent Coronavirus outbreak. This paper explores the potential of RegTech and the merit of incorporating it into a smart Treasury department.