RegTech: Compliance is expensive, non-compliance is more expensive
What is RegTech
RegTech, or regulatory technology, helps companies and institutions address regulatory challenges. RegTech software often helps companies automate and streamline regulatory compliance processes to bring down compliance costs. Moreover, using RegTech software heightens the compliance level and thus minimizes the risk of potential regulatory fines and penalties.
This digital approach towards compliance processes helps ensure efficient regulatory compliance, where the automation makes best practices easy to implement by embracing good compliance initiatives. RegTech can therefore be seen as an enabler of compliance, which is essential with the increasing compliance requirements in today’s society.
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Compliance is time-consuming and expensive
Technology has a major impact on compliance and the expected benefits of technology drives the ongoing development of RegTech software. A survey conducted by Reuters on the cost of compliance has shown that 61% of the surveyed companies expect an increase in their compliance budget for 2018. The survey also showed that 43% expect the size of their compliance team to grow, while 52% expect their team to stay the same.
The survey shows that companies are aware of the increasing compliance burden that has only become heavier when regulations like the General Data Protection Regulation (GDPR) and parts of the Markets in Financial Instruments II came into effect earlier this year. In general, companies are facing a heavier compliance burden than earlier and are anticipating an increase in costs.
Non-compliance is even more expensive
Compliance may be expensive, but non-compliance will cost you even more. Non-compliance can entail high fines and penalties that will not only hurt financially, but also hurt a company’s reputation.
Bank fines in relation to the aftermath of the financial crisis are estimated at more than $320 billion. Fines in relation to non-compliance with the GDPR can be as high as 20 million Euros or 4 percent of the annual global turnover of a company, whichever of the two is higher.
Impero offers a solution for complying with various regulations and streamline and automate processes. Impero is a cloud-based GRC solution that facilitates compliance and enables alignment and efficiency in administrative processes. View our introductory video here to learn more about Impero’s intuitive solution.