With the Fintech market gaining momentum across the globe, other markets -- such as Insurtech -- are now being examined to assess the disruptive potential of digital business technology. Regulatory compliance is one such area where IT innovation can transform the sector.
More than $340 billion in fines have been imposed on financial institutions in the decade since the financial crisis -- one report estimates that the total is likely to top $400 billion by 2020. Increasing requirements for transparency and growing scrutiny of ethical practices means that the cost of regulatory compliance will surely increase.
With an average of 10-15 percent of employee staff dedicated to compliance, banks and insurers are spending more each year to comply with government-imposed regulatory obligations. One solution to this growing challenge is better automation.
Robotic Process Automation Market Development
According to the latest market study by Juniper Research, insurers will spend $634 million on Robotic Process Automation (RPA) solutions by 2024, rising from $184 million in 2019 -- that's a 245 percent increase over the next 5 years.
RPA is software designed to reduce operational costs by automating basic repetitive tasks.
With no anticipated relaxation of regulatory oversight during the forecast period and the ever-increasing likelihood of financial penalties for governance failures, global regulatory compliance spending will increase from just under $278 billion to more than $316 billion over the next 5 years.
Juniper Research forecasts that growth in West Europe will be driven by potentially divergent regulatory rules mandated by the UK and the EU following Brexit. While disruptive, this will create additional opportunities for regulatory technology (Regtech) innovation in the region.
The combined cost savings for Know Your Customer (KYC) checks for banking and property sales will near $1 billion by 2024 -- that's a growth of 690 percent.
The impetus for this will be efficiency benefits, as well as the enhanced user experience that can be implemented in customer onboarding. This will reduce user frustration by improving response times; increasing overall user satisfaction.
Outlook for Regtech Applications Growth
As the financial systems of developing regions become more advanced, so will their needs for Regtech solutions. According to the Juniper assessment, these regions will have increased Regtech spending in the longer term.
Juniper recommends that organizations invest in the cost-saving potential of artificial intelligence (AI) and cautions that although AI has vast potential for Regtech applications, its use must be in line with overall business objectives or deployments will invariably fail to meet expectations.
More than $340 billion in fines have been imposed on financial institutions in the decade since the financial crisis -- one report estimates that the total is likely to top $400 billion by 2020. Increasing requirements for transparency and growing scrutiny of ethical practices means that the cost of regulatory compliance will surely increase.
With an average of 10-15 percent of employee staff dedicated to compliance, banks and insurers are spending more each year to comply with government-imposed regulatory obligations. One solution to this growing challenge is better automation.
Robotic Process Automation Market Development
According to the latest market study by Juniper Research, insurers will spend $634 million on Robotic Process Automation (RPA) solutions by 2024, rising from $184 million in 2019 -- that's a 245 percent increase over the next 5 years.
RPA is software designed to reduce operational costs by automating basic repetitive tasks.
With no anticipated relaxation of regulatory oversight during the forecast period and the ever-increasing likelihood of financial penalties for governance failures, global regulatory compliance spending will increase from just under $278 billion to more than $316 billion over the next 5 years.
Juniper Research forecasts that growth in West Europe will be driven by potentially divergent regulatory rules mandated by the UK and the EU following Brexit. While disruptive, this will create additional opportunities for regulatory technology (Regtech) innovation in the region.
The combined cost savings for Know Your Customer (KYC) checks for banking and property sales will near $1 billion by 2024 -- that's a growth of 690 percent.
The impetus for this will be efficiency benefits, as well as the enhanced user experience that can be implemented in customer onboarding. This will reduce user frustration by improving response times; increasing overall user satisfaction.
Outlook for Regtech Applications Growth
As the financial systems of developing regions become more advanced, so will their needs for Regtech solutions. According to the Juniper assessment, these regions will have increased Regtech spending in the longer term.
Juniper recommends that organizations invest in the cost-saving potential of artificial intelligence (AI) and cautions that although AI has vast potential for Regtech applications, its use must be in line with overall business objectives or deployments will invariably fail to meet expectations.