FINTECH REVOLUTION, REGULATORY AND SUPERVISORY CHALLENGES, AND OPPORTUNITIES FOR IMPROVEMENT BY UTILIZING REGTECH AND SUPTECH

Elvan Aktas
Karin Roland
Valdosta State University

ABSTRACT

Although the use of technology for compliance and supervisory monitoring predates the
2008-2009 financial meltdown, a new regulatory landscape in response to this crisis has been a
catalyst for greater use of technology. Global systemic shocks such as 2008-2009 financial
meltdown and contained domestic glitches such as the flash crashes in 2010, 2015 and 2019 are
forcing regulatory authorities and major actors in the financial sector to rethink about the future of
regulation and supervision of the contemporary financial institutions and financial services, i.e.
RegTech and SupTech.
This study attempts to close the gap between the application and organizational aspects of
RegTech and SupTech, by relating the existing literature to the policy aspect of RegTech and
SupTech. The contribution of this study is, most importantly, the discussion of the opportunities
and challenges related to the containment of the systemic risk in the financial markets due to the
new technologies. This study lays the groundwork for a preliminary discussion about how the
conduct and organizational frameworks relate to applicable policies for new regulatory and
supervisory systems. Finally, it highlights the inconsistencies, vulnerabilities and weaknesses of
the current regulatory and supervisory frameworks facing new technology challenges.

Keywords: Technology, FinTech, regulation, supervision, market risk