Future gazing: The growth of RegTech
The shipping and cargo industry is going through a time of transformation right now. Ongoing global digitization has already revolutionized communications and manual processes within the world of freight, but what could be next?
At PayCargo, we like to keep our eye on new developments and gaze into the future to spot the next stages of the digital tech evolution that will impact shipping, cargo, and the world of Fintech.
It’s no secret that the Fintech industry is thriving with the value of deals in the US in the first half of this year up by 60 percent to reach $12.7 billion.*
However, with an increase in money, often comes an increase in responsibility, and Fintech is no different.
That is why RegTech is one to watch as we move towards 2020.
RegTech is the management of regulatory processes within the financial industry through technology, with its main functions including monitoring, reporting, and compliance.
It is a fast-growing element of financial innovation and is expected to disrupt the finance sector through the use of data, real-time information, analytics, and algorithms to achieve regulatory and compliance outcomes.
According to a KPMG report, by 2022 RegTech is expected to make up 34 percent of all regulatory spending, accounting for $76 billion.**
That is big business, and it means that RegTech, as a concept and as a form of technology, could impact the supply chain as payments become digitized.
Here are just some of the reasons why:
- There is a growing regulatory climate in the world of finance and digital technology
- The increased use of data and the associated privacy concerns
- The possibility that VAT, duty, and tariffs could increase on a global basis
- Different country requirements may make it increasingly burdensome to manage supplier, contractual, and transactional relationships in a cross-border environment
As digital technology evolves and the use of online payment solutions continues to grow, we should expect even more changes to the nature of freight in the coming years, particularly when it comes to regulatory processes within finance. RegTech is the first step towards this and should be on the radar for the shipping and cargo industry as we continue to move forward.
* Source: Global Fintech article by Finextra, 2019
** Source: KPMG RegTech report, 2018