Project “RegTech&SupTech” is implemented within the framework of the National Recovery and Resilience Plan 2021–2026 and is financed by European Union funds through the NextGenerationEU instrument.
PROJECT DESCRIPTION
The application of new technologies and innovations in the financial system (acronym: FinTech) has had a strong impact on the financial system throughout history. The use of FinTech developed particularly intensively after the global financial and economic crisis of 2008. FinTech brings several advantages to financial institutions: (a) cost reduction, (b) optimization of business processes, (c) revenue growth through customization to individual customers, and (d) increased customer loyalty. It is important to emphasize that there are numerous types of FinTech; the application of technological solutions in the field of regulation is known as RegTech, while their application in the field of supervision is referred to as SupTech. Taking into account the large number of innovations in the FinTech domain, RegTech and SupTech are not merely subcategories of FinTech, but also important tools for more effective monitoring and regulation of FinTech initiatives. Research in this field indicates a growing trend, with most studies still focused on theoretical aspects, occasionally supplemented by case studies.
The level of regulation in the financial system is very high, as the financial sector is among the most highly regulated sectors of the economy. This results in over-regulation of jobs and business processes and slows down innovation. Therefore, enhancing knowledge about the application of technological solutions in the area of regulatory compliance is of exceptional importance from several perspectives: (a) increasing the efficiency of financial institutions (improved business performance), (b) contributing to the stability of the financial system, (c) supporting the digital transformation of the financial system, and (d) reducing the level of regulatory pressure, thereby allowing employees and business systems to focus more freely on improving existing processes and developing financial innovations.
A 2022 Thomson Reuters report on regulatory compliance costs shows that banks spend around 10% of their annual revenues on compliance (approximately USD 250 billion), while the size of the RegTech market was estimated at USD 12.5 billion in 2023, with expected growth to USD 100 billion over the next few years. In the area of SupTech, a 2023 study by the Financial Stability Institute and the Bank for International Settlements indicates that more than 90% of supervisors included in the survey use SupTech tools (47 out of 50 supervisors). However, the study also points out that a significant number of supervisors still do not have an adopted SupTech strategy (roadmap); in the referenced study, around one third of supervisors lack such a strategy, with the note that in practice this number is likely even higher, as the survey covers more technologically advanced supervisory authorities.
PROJECT OBJECTIVE
The main objective of the project is to analyze how digital technology contributes to high-quality regulation and supervision of the financial system (RegTech and SupTech). Through the project, the following additional objectives will be achieved:
a) To examine current trends and examples of the use of RegTech and SupTech
b) To compare the levels of adoption of RegTech and SupTech across different jurisdictions (e.g. the European Union, the United States, Asia)
c) To identify key trends in the implementation of these solutions
d) To develop recommendations and guidelines based on high-quality practical examples to improve the application of RegTech and SupTech in the financial system
e) To organize expert events (conferences) with relevant participants from the financial sector and the broader economy
f) Enhancement of the methodological framework for teaching delivery in accordance with digital advancement
