RegTech is an amalgam of the words regulatory and technology. By definition, RegTech is a method by which companies save on regulatory cost by utilizing certain technologies. These technologies include state-of-the-art-software, Blockchain, and AI. The editor of Banyan Hill Publishing’s “Total Wealth Insider” Jeff Yastine believes RegTech is worth investing in
What qualifies Jeff Yastine to proffer investment advice? His credentials start with devoting 20 years of his life to understanding the stock market. Jeff foresaw the 2008 bursting of the “housing bubble” that would lead to what has been called the “Great Recession”.
Jeff’s first job after graduating from the University of Florida was as a Sr. Correspondent for PBS’ “Nightly Business Report”. While reporting for the NBR he received a Business Emmy for a piece on the state of Cuba’s infrastructure.
The government imposes regulations on financial institutions. These regulations are intended to provide a fail-safe against graft and criminal acts like money laundering.
For banks, insurance companies and, etc. complying with these regulations costs $10 million. RegTech reduces those costs by 9,700,000 dollars. Multi-national banks are laying out $70 billion to stay within the rules. In the next 36 months, that amount will probably triple.
Change in the business world often spawns new regs which in turn spawn increased operating costs. One example would be a company having to expand its payroll to stay compliant.
A company might take on a Compliance Officer to create a Compliance Department. By employing RegTech companies can avoid the decrease in the value of their stock that often accompanies bigger expenditures.
As of this writing, there are around 100 RegTech companies like OnRule, Taxometry, and Comply Advantage. Some RegTech companies have made Initial Public Offerings and others have yet to issue any stock. More info at Talk Markets
For the time being, the market for RegTech is pretty much limited to banks and insurance companies. In time other industries will no doubt begin to see the value of RegTech.
Now that the government knows that RegTech exists it is contemplating seeking the input of RegTech specialist when formulating regulations. Two years ago, the Federal Government hinted that it might allow RegTechs to register as banks. Governmental acknowledgment bodes well for RegTech investors.
RegTech is the next great investment opportunity. It saves companies money on regulatory compliance costs. These savings can stabilize the value of a company’s stock. Governments around the world are recognizing the RegTech Industry. Visit:https://stocktwits.com/jeffyastine