Trends That Are Taking Compliance Technology To New Heights

By CIOReview | Tuesday, May 31, 2022

There are several developments taking place in compliance technology, and the trends driving these developments are the digitization of compliance management.

Fremont, CA: For a long time, company compliance standards have been increasing, and this trend will continue. Over the last two years, a shift has required compliance teams and RegTech firms to be on high alert. The pandemic's increased pressure has accelerated the development of some new rules that must be debated, examined, and enacted as soon as possible. This is where compliance management can benefit from digitization.

Trends that are taking compliance technology ahead are:

Clear regulations for cryptocurrencies

It is critical to have clarity. The issue that firms and authorities have is that everyone is establishing their own ways of how they want crypto to be regulated around the world. Spain, Singapore, and the United Kingdom have all recently published laws on crypto advertising, and each has its own set of rules. Clarity is needed across the board, not only in terms of legislative certainty but also in terms of cyber resilience, and this is before we even consider the investment risks associated with cryptocurrencies.

Adoption of regulation technology for ESG obligations

The year 2022 will be a watershed moment for ESG. The EU has set a goal of achieving carbon neutrality by 2050. Various rules must be implemented and enforced in order to achieve this aim. However, regulations have not been applied equitably to all parties, nor have they been enforced, making it extremely difficult for financial institutions. It's difficult, for example, to combine ESG and MIFID regulations and apply them to all customers. When it comes to ESG, labeling will be crucial, especially for bioproducts—common ground and standard definitions will be crucial within the sector.

AI and ML for automated regulatory management

Historically, the issue has always been data quality and reliability. While this is likely to remain the case, the addition of more mature and powerful data sets to the mix has been noticeable. As this trend continues, human interaction and data understanding will improve, allowing AI and machine learning to be used in a wider range of applications.