Advice from a consultant: When is it time to adopt RegTech?
20th June 2025 by Brielle Hewitt
RegTech is transforming the way that compliance teams operate.
By automating lengthy and manual processes, identifying risk more accurately and streamlining data monitoring and reporting, RegTech empowers teams to keep their businesses compliant through evolving regulations and an ever evolving hybrid and remote working environment.
But the decision to invest in RegTech should come with careful consideration. Compliance leaders should assess whether the benefits to their team and wider business justify the cost of this technology. So, in our third article of Advice From a Consultant, we’ve teamed up with Peter Bowyer, Senior Compliance Consultant at Bovill Newgate, to share his practical advice on when it is time for regulated firms to invest in RegTech, and what to think about before they do.
When is it time to adopt RegTech?
Peter says:
“Ever since I’ve worked in the industry, there has always been a perception that the compliance function is a blocker to business, but I don’t agree with that at all. The compliance function supports the management of regulatory risk and ensures the business is compliant with current regulations. If the business is unable to remain compliant then it runs the risk of regulator censure, e.g. fines, enforcement, prohibitions to taking on new business, or at worst the cancellation of regulatory permissions. If that happens then firms are faced with real blockers to business.
To that end, firms need to remember that money does need to be spent on compliance. An investment into RegTech becomes necessary when a compliance team is stretched too thin, overwhelmed by manual tasks, and/or cannot monitor risks effectively and to regulatory standard across the whole business. You’ll often see this with growing businesses, and those with lean operating models who have one compliance or operations officer, with an unsustainable amount of data to monitor and tasks to do, by themselves. In these kinds of situations, RegTech can be a great investment to monitor data at scale and efficiently and keep your growing business compliant.”
Here are some signs that your compliance team is ready for RegTech:
- Excessive time spent on ineffective and repetitive tasks
- Team takes a reactive approach to risk identification and monitoring rather than a proactive approach because of limited time and resources
- Team struggles to scale compliance monitoring with company growth, with danger that growing business is not fully compliant with regulations and risks are potentially being missed.
The value of RegTech lies in saving your business time, improving efficiency and mitigating against risk proportionately. If a system completes the work of one full time compliance employee in ten minutes instead of eight hours, that will free up valuable time for other important work and save on staffing costs.
How can your compliance team prepare for RegTech?
Peter says:
“RegTech is a control. You can’t put a control in place without understanding the risks it is trying to manage. Before you invest in RegTech, you must understand the specific risks that apply to your business and then assess how well RegTech can address those risks.”
This is best done through completing risk assessments across your business lines. You can start by identifying:
- What are the relevant risks in our sector?
- Do these risks apply to our business?
- What is the extent to which these risks apply to our business, both in frequency and severity?
- What existing controls do we have in place to mitigate these risks— and are they working?
- What further controls can we put in place to actively identify and mitigate these risks?
If you identify gaps in your risk controls, then RegTech may be the perfect investment to strengthen your risk management. Firms can avoid the devastating costs of non-compliance with a smart investment into RegTech, preventing regulatory fines, severe reputational damage and a loss of investor confidence.
What should firm consider when investing in RegTech?
Peter says:
“RegTech is not just an investment of money, it requires an investment of time at the outset as well. Firms need to ensure that they do their research into various solutions and providers to ensure they find technology that suits their business and team, as well as effectively mitigating the risks the firm is exposed to. Firms need to be confident they are spending their money wisely and the RegTech they invest in will support their compliance processes both now, and as the business grows”.
Here are some things to keep in mind when looking for a RegTech solution:
- Configurability: Can the RegTech solution be customised to fit your firm’s specific needs?
- Risk Alignment: Does the RegTech address and identify the various risks applicable to your business?
- Scalability: Can this RegTech scale with your business and keep pace with increasing complexity?
- User Interface: Is this RegTech user-friendly and easy to navigate? Does is streamline processes, and improve output?
- Future-Proofing: Can this RegTech evolve and scale to satisfy changing regulations?
- Value for Money: Is this RegTech and the benefits it brings to your business justifiable for the price you will pay?
By considering these questions while researching solutions, you can ensure you invest in the right RegTech solution for your team and business.
Conclusion
RegTech is quickly becoming a necessary tool to assist compliance teams to mitigate various risks across enormous amounts of business data,processes and ever evolving regulations. Careful consideration should be made to ensure you invest in RegTech that is right for your business. By looking out for signs that your compliance team are ready for RegTech, having a good understanding of how RegTech can address business risks, and asking yourself key questions around the suitability of RegTech for your business, you can ensure you make a good investment that brings benefits for years to come.
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