What is RegTech?

The term RegTech first appeared in 2015 in the UK Financial Conduct Authority's strategy as a subset of FinTech specifically dedicated to the efficiency of regulatory handling ^[1]. The European Banking Authority adopted the term formally in its first European RegTech analysis in 2021, defining RegTech as "any range of applications of technology-enabled innovation for regulatory, compliance and reporting requirements implemented by a regulated institution" ^[2].

RegTech is not to be confused with SupTech: SupTech (supervisory technology) is software used by *supervisors* themselves when conducting supervision — i.e. the tools of BaFin, EIOPA, ESMA, AMF, EBA and so on. RegTech is software used by *supervised institutions* to discharge their compliance obligations efficiently.

The EBA groups RegTech applications into seven categories: AML/CFT (know-your-customer automation, transaction monitoring), fraud prevention, prudential reporting (e.g. FINREP, COREP, Solvency II QRTs), regulatory reporting compliance, ICT security, customer risk assessment — and, with the most measurable efficiency outcomes: **regulatory horizon screening** ^[2].

Horizon scanning as a RegTech use case addresses regulatory volume: 45 EU/EEA supervisors collectively produce several thousand regulatory outputs per year — RTS, ITS, Q&As, opinions, supervisory letters, consultation papers. Manual handling no longer scales ^[2].

Three structural forces converge. First, regulatory volume: DORA, MiCA, AMLA, EU AI Act, CSRD, TFR, NIS2 — seven EU frameworks with significant application windows between 2024 and 2027. Second, supervisory expectation: EIOPA and EBA increasingly expect proactive tracking from supervised institutions ^[3]. Third, internal economics: McKinsey's compliance-function studies show that FTE growth in compliance has peaked — future scaling comes from technology ^[4].