Globally, banks have 10–15% of their staff dedicated to compliance on average. According to a study cited in the Cost of Compliance 2018 Report, regulatory divergence (costs, risks, impacts) costs financial institutions 5–10% of their annual turnover (on average). This consumes senior management time as well as capital that could otherwise be focused on identifying emerging risks in the financial system. Ultimately, these costs are a barrier to international growth – more than $780 billion annually in costs to the global economy are conservatively inferred by the findings.
Source: Cost of Compliance 2018 Report
Meanwhile, investments in regulatory software can lead to an ROI of 600% or even more with a payback period of fewer than three years.
Use cases of RegTech solutions cover a broad range of applications: identity validation, risk management (which includes scenario modeling and forecasting), transaction monitoring & auditing systems, web due diligence & security, identity controls – these are just some of the cases where technology startups are actively filling the gaps.
Source: The Future...