Fintech vs. Regtech

January 24, 2023

What is the difference between the terms fintech and regtech? Both terms are generously applied to banking and financial services industries and regtech is often assumed to be a subset of fintech. Additionally, they seemed to be applied to banking and financial services exclusively. But, it seems to me, that regtech applications are potentially wider and deeper than fintech applications which almost exclusively serve banks and financial services companies.

As a starting point, we should deconstruct the definitions of fintech and regtech. (are they blend words or portmanteaus?)

Here is the definition of fintech from Wikipedia:

“fintech is a new financial industry that applies technology to improve financial activities”

Here is the definition of regtech from Wikipedia:

“Regulatory technology, also known as “RegTech”, a subclass of FinTech, is using technology, particularly information technology, in the context of regulatory monitoring, reporting and compliance benefiting the finance industry.”

I disagree.

While fintech and regtech are changing the face of banks and financial institutions, regtech is applicable in many more industries. Complex regulatory requirements are NOT unique to banking and financial services. In fact, while we are pushing thirty financial institutions as customers, in the near future we will be announcing our first regtech applications for our clients in the pharmaceutical industry, human resources and municipalities. Almost everywhere we look, there is an opportunity to apply our technology to dramatically reduce the cost of compliance.

Therefore, I’d argue that the definition of regtech should be expanded to include all industries with compliance challenges and that fintech is a subset of regtech.

At Trust Exchange we are using social technologies (crowdsourcing and gamification) and Cloud Computing to disrupt how businesses exchange information. If you have a complex compliance problem and are interested in lowering your costs while simultaneously getting a better solution, contact us.