Configuring the RegTech business model to explore implications of FinTech

Abstract

Regulatory technology (RegTech) is a significant technology in the financial technology (FinTech) field that can assist FinTech and innovations to solve issues of complying with laws and regulations. However, RegTech is mainly composed of the finance, regulatory and emerging technology sectors, and its business model involves multiple dimensions, such as those among governments, banks and technology companies and cross-border FinTech. Therefore, RegTech startups exhibit distinctive features, and the optimum business model for their operation needs to be rapidly determined. This study uses a business model canvas (BMC) as an example to configure the elements and determinants of a RegTech start-ups and applies the Delphi technique and multiple criteria decision-making (MCDM) approaches for the analysis.

The results indicate that ‘customer relations (CR)’ and ‘key activities (KA)’ are the most significant BMC elements. Additionally, the relevant top-ranked determinants are, in their order of importance, ‘Big Data analysis’, ‘system feasibility evaluation’, ‘long-term customization’, ‘data assessment and stakeholder descriptions’, and ‘short-term projects’. In particular, business models of RegTech are the most complex in FinTech. This study concludes with business elements that can be beneficial not only for RegTech advancement but also for other emerging technologies in the FinTech.