The Role of RegTech in Automating Compliance and Risk Management

The growing complexity of regulatory requirements in the financial services industry has intensified the need for efficient compliance and risk management systems. Regulatory Technology (RegTech) offers a solution by automating compliance processes. This study evaluates the effectiveness of RegTech in automating compliance and risk management tasks and identifies the challenges involved. The research is guided by the question: How effective is RegTech in enhancing compliance efficiency while mitigating operational risks? A mixed-methods approach was used, with data collected from 205 financial institutions, including banks, insurance companies, and regulatory bodies that have adopted RegTech. The findings show significant improvements in compliance speed and accuracy, though challenges persist with legacy system integration and the need for skilled personnel. The study emphasizes RegTech's role in reducing operational risks and promoting sustainable financial practices, aligning with Sustainable Development Goals (SDG) 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure). The results suggest that institutions implementing RegTech will see enhanced compliance efficiency, reduced risks, and improved sustainability. This research pro- vides valuable insights for financial institutions aiming to leverage technology for optimizing compliance strategies and gaining a competitive edge.