Examining the ROI & Benefits of RegTech Solutions for Businesses

Compared to pre-financial crisis spending levels, operating costs spent on compliance have increased by over 60% for retail and corporate banks. With that, the global demand for regulatory, compliance and governance software is expected to reach $118.7 billion by 2020.

Investments and regulatory compliance solutions, however, cannot be seen exclusively as an expense account anymore and proven to be worth the hassle. Estimates suggest that investments in regulatory software can lead to an ROI of 600% or even more with a payback period of fewer than three years. While the estimate is allowed to be off, case studies prove investments in risk, governance, and compliance solutions to be bringing material benefits to clients across industries.

Large banks have invested substantial time, efforts and money in their existing compliance systems, hence are reluctant to implement new RegTech solutions unless there is a significant return on investment. However, when revenues and margins are under pressure, significant cost savings (upwards of 40-50%) as a result of reduced manpower, lower cost of technology and improved decision making becomes attractive to banks. - Arun Iyer, EVP, Hexanika

Use cases of RegTech solutions are much broader than commonly known regulatory reporting. Identity validation, risk management (which includes scenario modeling and forecasting), transaction monitoring and auditing systems, web due diligence and security, identity controls – these are just some of ...