The cost of doing business as a credit union keeps rising. In the past few years, regulatory expenses have steadily increased. Smaller credit unions averaged 1.12% of their total assets, while large credit unions averaged 0.33% (Hui, Myers and Seymour, 2016). One of the hopes of regtech is that it will improve the efficiency of managing regulations and reduce this high cost of maintaining regulations. One thing we can all agree on is that maintaining compliance is a sometimes inefficient process.

Regtech Is Still New

When Filene conducted research of regulatory technology use among credit unions, the term was virtually unknown to many credit unions. Regtech is the term used to describe the new wave of financial technology designed to address regulatory requirements. Regtech makes use of data from an individual credit union, databases of regulations and compliance-based algorithms. Most credit unions use some sort of regtech already, such as enterprise risk management software or fraud protections and alerts. But when viewing regtech as an offshoot of fintech, there are a number of cutting-edge, digitally-based technologies engineered to help credit unions monitor, report and comply with regulations.