Regtech and suptech – new words for old terms
The use of information technology in the field of finance was the beginning of such a popular direction of IT as fintech. It should also be noted that the growth of fintech was influenced by the conservatism of the banking sector, as intermediaries between customers and payment systems. And, of course, cryptocurrency and blockchain: thanks to these technologies, cross-border calculations are as cheap as possible for a client.
In turn, regtech and suptech are areas of information technology that monitor compliance with laws and regulatory frameworks.
However, regulatory technologies are by no means a new direction that originated here and now. As it turned out, the origins of business are connected with the distant 2008 when the world was shocked by the financial crisis.
At that time, regulators were accused of insufficient control over the business. Especially – in the USA, a country of opportunity, where everything that is not prohibited is permitted. And a businessman is not limited by anything except a specific legislative base. As is known, it was from America that the global crisis began. Therefore, as a reaction to the accusations of regulators, a huge amount of legislation appeared during the year. It was a challenge for business management. Instead of being engaged in the production or provision of services, one had to understand the intricacies of new regulatory acts. In addition, we had to hire an additional staff of lawyers.
But, as usual, technology companies have helped the world. They offered a variety of improvements. For example, there are services that make up the electronic reporting of the available internal data. Systems have also emerged to simplify the drafting of various documents. And, of course, the end of the 2010s gave rise to the emergence of new outsourcing IT business to verify the legitimacy of all the processes taking place in the company. All this led to a huge number of startups and firms that are engaged in regulatory technologies.
Regtech and suptech – electronic reporting and its control
Suptech is also a reaction to complex legislation. True, we are talking about the second side of the process – directly the regulatory bodies themselves. It is not enough to initiate new rules of the game. More importantly – to monitor their implementation. Electronic reporting companies must be independently verified for the accuracy of the numbers provided. Also, it is important to match the data that is sent to the tax authorities, those that appear in the news.
Suptech is related to business control. Powerful computing systems and processing algorithms for huge amounts of information come to the rescue. Supervisor technology is about supervising the implementation of legislation with the help of information technology.
Technologically, suptech uses artificial intelligence, machine learning, and big data. The subject of the search is illegal schemes and false information provided to the tax authorities. Also, with the help of suptech, it is possible to calculate whether companies really need investments and in what amounts.