According to Jeff Yastine it is always possible to tell when bureaucrats become involved in an industry. A Chief Compliance Officer is required for every company, and lieutenants make up an entire department to comply with the newest diktat. Whether the added rules make the situation worse or better is a debate. One thing not debatable is the additional rules drag the prices of a company’s stock and increase costs. The exception is regulatory technology or regtech. Regtech is employing tools such as blockchain technology, artificial intelligence or advanced software to pursue the decrease of regulatory costs.
Eighty companies were identified as emerging regtechs last year by Bain & Co. Their names are unfamiliar, and most are still close to the startup stage. These companies are destined to show substantial growth according to bloomberg.com. Global banks spend roughly $70 billion in ensuring compliance with the jurisdictions and rules in business. In the next three-years, the figure is expected to increase to $120 billion. It can take over two-years and ten million to fulfill regulations with computer systems. A regtech specialist can accomplish the same thing for $300,000 in three months. In Europe, the estimation for banks to comply with EU’s financial regulations costs more than $1 billion.
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The regulators have noticed the regtech companies, and brought them into their ecosystem. The Bank of England is the monetary authority for Singapore, and along with the Office of the Comptroller, or the OCC, have made propositions regarding regtech companies. The OCC proposed last year some regtech companies can provide federal pre-emption due to their access to the national bank charter according to linkedin.com. Attention should be given to these companies regarding investment considerations since they have already been given a seat at the proverbial table.
Jeff Yastine currently works for the Total Wealth Insider as their editor. His career with Banyan Hill Publishing began in 2015 as the editorial director. He brought over twenty years of experience to the company due to his work as a financial journalist and an investor in the stock market. He helps investors grasp business monetary and economic trends with his contributions to the Winning Investor Daily, and the Sovereign Investor Daily each week.
Find more about Jeff Yastine: https://jeffyastineguru.com/
— Jeff Yastine (@Jeff_Y_Guru) November 9, 2017