Volosovych Svitlana, Doctor of Economics, Professor of the Department of Finance, Kyiv National University of Trade and Economics, Kyiv, Ukraine

ORCID ID: 0000-0003-3143-7582
e-mail: volosovich_sv@ukr.net

Vasylenko Antonina, PhD (Economics), Associate Professor of  the Department of Finance, Kyiv National University of Trade and Economics, Kyiv, Ukraine

ORCID ID: 0000-0003-2028-9748
e-mail: av_vasylenko@ukr.net

Regtech in Financial Technologies Ecosystem

Abstract. Introduction. The emergence of financial technologies has transformed the financial market, influenced the transformation of the fiscal system, social security systems and public administration. Over the past decades, the development of the Internet has revolutionized communication, which has become a major factor in world economic growth and a powerful tool for sustainable development. On the one hand, it has made it possible for businesses and consumers around the world to benefit from the efficiency, speed and convenience of digital transactions and the information exchange, on the other hand, it has increased the likelihood of financial loss, data leakage and reputational losses through cybercrime.

Purpose of the research is to study the place, role and purpose of regulatory technologies as part of the financial technologies ecosystem.

Results. The FinTech ecosystem is a complex of traditional financial intermediaries, their associations, FinTech-companies, infrastructure companies, startups, regulators, accelerators, incubators (sandboxes) and consumers that interact with each other in cyberspace, thereby increasing the efficiency of customer satisfaction, the security of financial transactions, optimizing of service providers and regulators activity. Its purpose is to maintaine the choice of society through transparent and fair processes and tools; to provide its participants at all levels with accessible, reliable, flexible tools; influence on some participants of the FinTech ecosystem when applying tools to other participants; encourage the sustainability of the FinTech ecosystem. Increase of the costs and risks control effectiveness, release of excess regulatory capital, providing new opportunities for startups, consulting companies and FinTech companies are the benefits of RegTech for financial service providers. RegTech (SupTech) allows regulators continuously monitor financial market for prompt identification of problems, reduces time needed to investigate violations of compliance by financial institutions, promotes the creation of incubators that identify the likely effects of the introduction of new tools and business models in the financial market.

Conclusions. Regulatory technologies are an integral part of FinTech, within which big data, artificial intelligence, blockchain are actively used. The development of RegTech has intensified as financial crises become more frequent, resulting in increased regulatory requirements for financial institutions. As a result, regulatory technologies are actively implemented by financial institutions to improve the efficiency of regulators’ compliance, and also regulators use such a component as SupTech to optimize their supervisory functions.

Keywords: financial technologies; regulatory technologies; financial technologies ecosystem; blockchain; big data; artificial intelligence.

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