You've heard of fintech - now meet its successor. Under mounting pressure to become more transparent and accountable, banks and financial institutions are turning to regtech: technology that automates regulatory compliance. It's an ugly word, but it could be significant: if fintech is going to flourish, then regtech could be its enabler. "I would definitely see regtech as a growth area," says Sean Smith, a partner in Deloitte's Dublin Risk Advisory department. "There's been relatively less investment in this space than fintech, but the potential prize is significant." Here are five that WIRED finds intriguing.
London-based FundApps alerts financial institutions when regulations change, and gives them software to help compliance. Launched in 2010, it covers 88 jurisdictions. "We work with our legal information provider, who tells us when regulations change in a specific country," says co-founder Andrew White.
Legislation in Europe requires companies to "know your customer" to make sure they're not money laundering. That's what Trulioo does. "Our clients can leverage more than 200 trusted data sources to perform identity checks," says co-founder Stephen Ufford, 39. The Vancouver-based startup claims to cover more than four billion consumers.
Qumram, Switzerland
Qumram records, retains and allows on-demand replays of digital activity across web, social and mobile. "We allow compliance teams and regulators to see what the customer saw and when they interacted with a financial services firm," explains CMO Nicola Cowburn. The firm has more than 50 clients, including UBS and Credit Suisse.
US accounting rules require banks to store historical loan data to predict future repayment. "This is what we help them do," says Vivek Subramanyam, CEO of Fintellix. Launched in 2006, it recently launched a website targeting US community banks and credit unions that are grappling with accounting regulations.
KYC3 ("Know Your Customer, Counterparty and Competition") automates due diligence, so companies can screen potential clients. The startup, which launched in 2014, recently closed a £1.7 million round. "Regtech is about using technology to turn regulatory lemons into lemonade," says CEO Jed Grant, 46.
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This article was originally published by WIRED UK
