Jeff Yastine, editor of Total Wealth Insider, wrote about the next up-and-coming tech industry. He reminded his readers that when things stay the same, they stagnate. In every aspect of life, everything must change eventually. When it comes to the business world, change often arrives in the form of additional rules. No matter how you look at it, more rules increase costs for businesses, which may have the added consequence of dragging down a company’s stock prices unless the business in question welcomes “regtech” or regulatory technology.
What is Regtech?
Regtech is a major investment opportunity. It is the use of advanced tools such as blockchain technology, artificial intelligence and other state-of-the-art software. Companies can use this technology to decrease regulatory costs.
Last year, Bain & Co., the global management consulting firm, acknowledged 80 new companies, ones that it referred to as “emerging regtechs.” The services and products of these companies are making their way into industries that are highly regulated such as the banking and insurance industry. To increase profits, these industries need an influx of technology.
Most of these 80 companies are still privately held and are close to the startup phase. They have unknown names like OnRule, Taxometry and Flexeye. But, these tech-based companies along with the ones that trade publicly are sure to grow a lot within the next few years, giving investors an opportunity.
Let’s Talk Payments, a financial technology website, reported that international banks are spending about $70 billion to make sure that they’re following every rule established by the business jurisdictions. The amount that these types of banks are spending is expected to grow to around $120 billion within the next three years as they look to spend more in regtech products and services.
The Cost of Fulfilling Regulations
Fulfilling regulations costs money. Whenever an individual opens an account or makes changes to an existing one, financial institutions require them to sign forms to verify their identity. Most of this type of paperwork comes from rules that are designed to prevent money laundering and corruption. Working to fulfill these rules while ensuring that compliance remains current through legacy computer systems can cost more than $10 million. On the other hand, a regtech specialist can take care of the same requirements for around $300,000. These types of costs are even higher in Europe. According to financial institutions like Deutsche Bank and HSBC, complying with the EU’s financial regulations costs more than $1 billion a year. Regtech gives them a way to decrease these costs.
Into the Fold
Making the investment potential even greater is the fact that regulators are noticing the financial benefits that regtech provides. Because of this, these officials are starting to propose bringing regtech companies into their bureaucratic circle in the same way that Moody’s and Standard & Poor’s have authorization by federal regulators to maintain credit ratings for the bond market. In fact, just last year, the OCC suggested giving some regtech companies access to a special national bank charter, one that would give them bank-like authority.
Advice You Can Trust
When Jeff Yastine makes an investment suggestion, it’s a good idea to listen to him. Regtech’s use of advancements has the potential to increase profits for the financial sector. Those who invest have the opportunity to benefit as well by investing in the regtech companies that he recommends.
Jeff Yastine offers more than 20 years of stock market experience. To help people invest, he is a weekly article contributor and writes for Banyan Hill’s “Winning Investor Daily” and “Sovereign Investor Daily.” In doing so, he gives investors information about economic, monetary and business trends. Yastine became the editorial director of Banyan Hill Publishing in 2015.
Yastine attended the University of Florida from 1983 to 1986, earning his Bachelor of Arts degree in telecommunications. After graduating from college, Yastine worked as a Sr. Correspondent for the Nightly Business Report on PBS. He held the position for 17 years. From there, he became the Editorial Director of the Oxford Club LLC. Following the Oxford Club, Yastine started working for Newsmax Media where he remained for just over two years. Yastine’s next move was to Banyan Hill Publishing.
While Jeff Yastine was working at PBS Nightly Business Report, he received an Emmy nomination. He has also interviewed and learned how to invest from some of today’s most successful investors and financiers including people like Warren Buffett, Sir Richard Branson and Michael Dell.
His reporting helped to pinpoint successful investment opportunities, ones that involved major bank turnarounds and small-cap growth stocks in addition to investment opportunities in other sectors like “big box” retail and biopharmaceutical.
With his financial reporting, Jeff Yastine was able to issue a warning to investors about the real estate crisis that happened during the mid-2000s as well as the unsupportable rise of the dot.com bubble. Yastine also reported on important national events including the financial impact that came with Hurricane Katrina along with the Deepwater Horizon oil spill that occurred in 2010.
Jeff has also spent time in Cuba to report on how foreign investors have impacted the nation’s economy. In 2007, Jeff received a Business Emmy Award for reporting on the country’s lack of funding for bridges, roads and other types of public infrastructure. Jeff’s investment and life experience make him a trustworthy advisor to the masses.