Enhancing Compliance and Efficiency in Islamic Banking through RegTech Solutions

A tsunami of new laws was enacted in the banking industry as a result of the financial crisis. Since then, it has become increasingly important to consider how financial institutions can maintain compliance with this constantly growing financial legal framework. The prospective use of RegTech solutions to assure legal compliance is examined in this presentation. RegTech is the application of technology to simplify compliance with and oversight of regulatory obligations. RegTech is nearly universally praised in modern legal doctrine as bearing the prospect of significant gains in terms of improved efficiency and less risk of human errors and ensuing administrative fines. Finally, this article highlights the critical function of the financial supervisor in the RegTech age as a liaison between legislators and financial institutions. RegTech does speed up the transition to a cooperative supervision model where the supervisor supports financial institutions in their quest for adequate and accurate compliance and where financial institutions provide supervisors with crucial input for the creation of effective standards, best practices, and RegTech solutions.