The biggest challenge appears to be data. In order to derive the desired results from automation, the input data need to be unbiased and clean; otherwise, the results are bound to be awry.
FREMONT, CA: The emergence of RegTech as a cost-effective method has helped corporations to comply with the changing regulations. The key drivers boosting the growth of the RegTech market include the adoption of a regulatory sandbox, rising costs of compliance, and better accessibility to Software-as-a-Service (SaaS)-based offerings. While RegTech benefits corporations in many ways, there are still some challenges for them to overcome.
Let us look at the challenges associated with RegTech:
The Data Adversities
Though RegTech is a promising solution for compliance adversities, some obstacles still need to be fixed. The biggest challenge appears to be data. In order to derive the desired results from automation, the input data need to be unbiased and clean; otherwise, the results are bound to be awry. Data determines the success and fall of RegTech. Since not all data is usable, and it must be filtered and processed to make it use-worthy.
The standardization of data has become another challenge for RegTech. Data is always changing: one replacing the former. While documents are subjected to auditing, the same can not work for data.
Human Resource Requirements
Improving the quality of data requires intensive human effort. It is estimated that 10-15 percent of the entire workforce is currently committed to compliance activities and risk management. With an increase in compliance requirements and volumes of data, the human resource requirements would also skyrocket. Hence, organizations will need to train their workforce accordingly.