RegTech in Europe

Regtech is software that a regulated firm uses to meet its regulatory duties. At EU level, the EBA's analysis of regtech in the EU financial sector is the reference text: it defines the term, surveys how banks use it and names the risks of a tool that is poorly implemented. For a vendor, Europe matters because more and more of the rules sit in regulations that apply directly in every member state, with no national law in between, so a compliance product built for the EU text works from Lisbon to Helsinki.

The national layer has not disappeared. Supervision still runs through national authorities such as BaFin in Germany, the AMF in France or the Central Bank of Ireland, and each reads the EU rules with its own practice. The regtech in Germany and regtech in Frankfurt pages go into the German side.

Four EU laws drive most regtech purchases in Europe. The Anti-Money Laundering Regulation (AMLR) brings customer checks and transaction monitoring into one directly applicable text, and the new authority AMLA in Frankfurt will supervise a group of large cross-border firms directly. DORA requires a register of every ICT contract, including regtech tools bought from third parties. The EU AI Act adds documentation and oversight duties for high-risk AI such as credit scoring. MiCA brings crypto-asset service providers under the same kind of compliance program as banks.

Reporting is the fifth driver. The EBA's move to its data point model DPM 2.0 changed the specification that every reporting engine in the EU builds against.

The European Single Access Point (ESAP), set up by Regulation (EU) 2023/2859, will give free digital access to the financial and sustainability information that EU companies and investment products publish. ESMA must make the platform available to the public by July 10, 2027. Collection starts a year earlier, when collection bodies such as national authorities and officially appointed mechanisms feed in the first set of data on transparency, short selling and prospectuses. Further phases add more data, ESG information among it, in later waves.

For regtech, ESAP changes two things. Firms that must publish information will have to deliver it in machine-readable form with the metadata ESAP expects, and data and screening tools get a single EU source to read from instead of 27 national registers.

A regtech startup that wants to talk to a supervisor before it launches has a place to go in most EU countries. The European Forum for Innovation Facilitators (EFIF), launched by the European Commission and the European Supervisory Authorities in April 2019, brings together the innovation hubs and regulatory sandboxes that national and European supervisors run across the EEA. Its members come from banking and payments, insurance and securities supervision in all 30 EEA countries.

An innovation hub answers questions about how a rule applies to a new product; a sandbox lets a firm test under supervision. The ESAs have recommended steps to make these facilitators work more alike across the EEA, which matters for a regtech firm planning to scale from one country to the next.

Finance Loop is the meeting place for compliance, risk and data people from European banks and insurers and for the regtech firms that work with them. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg.

Finance Loop partnered with the Point Zero Forum in Zurich, an initiative of the Global Finance and Technology Network and the Swiss State Secretariat for International Finance that brings central bankers, regulators, policymakers and industry leaders together. It highlighted fAInance in Frankfurt on AI governance, risk and compliance. The suptech in Europe page covers the supervisors' tools, from the ECB to EIOPA and AMLA.

A regtech company sells software or data services that help regulated firms meet their duties. Examples are reporting engines, anti-money laundering monitoring, sanctions screening, identity checks, and tools that track regulatory change. In Europe its customers are banks, insurers, asset managers, payment firms and crypto-asset service providers, and each customer stays responsible to its own supervisor for the outcome.

The European Commission writes the EU rulebooks that regtech implements, and together with the European Supervisory Authorities it launched the EFIF to bring the national innovation hubs and sandboxes together. ESMA runs ESAP, the EU access point for company data.

The AMLR for anti-money laundering, DORA for ICT risk and third-party contracts, the EU AI Act for high-risk AI, MiCA for crypto-asset services, and the EBA reporting framework with its data point model. ESAP adds publication duties for listed companies and investment products.

Several. The RegTech Convention by Regnology runs in Frankfurt and has added a day in Zurich, and the Point Zero Forum in Zurich puts regulators and industry on one stage. Finance Loop lists current dates in the events overview.