RegTech and SupTech: Opportunities and Challenges in the Financial Sector

Abstract

A systematic literature review is going to be conducted regarding the various applications, prospects and challenges of the emerging fields of Regulatory and Supervisory Technology, or in short, “RegTech” and “SupTech”. These terms refer to the use of innovative technologies in order to facilitate regulatory and supervisory processes. The analysis will start with the evolution of the sector, an explanation of the technologies employed and the current applications. Moving on, the potential risks and limitations of the use of technology in regulation will be thoroughly analyzed as well as the various opportunities for the improvement of regulatory and supervisory processes. It should be argued, that these fields could potentially transform the regulatory and supervisory system and why such a reformation may be needed. They could provide the necessary tools for regulators to address the needs of the IT-focused 21st century but before proceeding with their mass adoption several operational challenges should be addressed.