ABSTRACT
Complying with the exponentially growing body of financial regulation is one of the most pressing challenges facing the financial sector today. Part of the solution appears to be programming compliance into RegTech: technological solutions that facilitate compliance with and monitoring of regulatory requirements. In this contribution, we have distinguished three types of RegTech based on the party taking the initiative for its development: (i) Compliance RegTech, where financial institutions develop or acquire RegTech tools to facilitate compliance; (ii) Supervisory RegTech, where a supervisor imposes the use of a certain RegTech tool to facilitate compliance, supervision and/or enforcement; and (iii) Regulatory RegTech, where the regulator provides machine-readable and/or machine-executable regulation. This approach allows for a nuanced analysis of the benefits and challenges of RegTech, and of the changing role of supervisors in a RegTech era.
