What are the biggest drivers of RegTech solutions? 1 Our 2016 Global FinTech Survey showed that a large majority of respondents (73%) rated cost reduction as the main opportunity related to the rise of FinTech. Compliance costs have been rising at the big global 79% banks. For example, a major US bank hired an additional 4,000 compliance employees in 2013, and another major US based global bank is on pace to 2 Our 19th Annual Global CEO add more than US$3 billion to its compliance budget. Survey identified that CEOs A tough economic environment and increasing compliance related cost puts continue to be very concerned a downward pressure on the Return on Equity (ROE) targets of financial about increasing regulatory institutions. In addition, the regulatory landscape continues to become complexity. In fact, 79% of CEOs cited more complex and this requires a more agile response from the financial over-regulation as a top threat institutions. However, the legacy compliance and regulatory systems do not to their organizations’ growth allow for an adaptable infrastructure. Attempts to change the infrastructure prospects—making it the fourth leads to a struggle that’s often expensive, extremely difficult and only year in a row that regulatory occasionally successful. concerns have risen.3 Regulation technology, or RegTech, has allowed for the rise of a new breed of tools and platforms. Applied to regulatory-related needs, these innovations could transform the landscape by automating processes, lowering costs and increasing effectiveness. Organizations that face steep regulatory compliance costs and a lack of an agile environment will likely invest in new RegTech solutions. These RegTech innovations could include solutions for audit, finance, risk management and other areas related to regulatory compliance. By making the most of advanced algorithms, machine learning, analytics and real-time capabilities, RegTech solutions stand apart from traditional software tools. Figure 1: What are the biggest drivers of RegTech solutions? 73% 62% 57% 56% etention evenues eduction entiation oved customer r fer Cost r Dif Impr Additional r 1. PwC state of compliance study 2016. Retrieved October 27, 2016. 2. Publicly available sources 3. PwC. January 2016. 19th Annual global CEO survey. Retrieved October 27, 2016. The changing landscape How to use RegTech and make regulatory compliance your strategic advantage 3