The use of regulatory technologies (regtech) in the digitalization of the banking sector

Abstract

Regulatory technologies (RegTech) are a new paradigm of supervision in the banking sector. The use of RegTech is widespread among second-tier banks in Kazakhstan. The purpose of the article was to consider the potential of RegTech solutions for automating rules and principles, and their application in the second-tier banking system in Kazakhstan (on the example of Kaspi BANK JSC).

The analysis focused on the implementation of regulatory technologies in the banking sector of Kazakhstan. The level of implementation of regulatory technologies in the banking sector of Kazakhstan was studied by the method of analysis. It studied the level of digital development of the advanced innovative bank 'KASPI Bank' and its impact on financial indicators. The use of technology, solving everyday problems, allows bank regulators to save costs, optimize resources, and improve speed and flexibility. RegTech is not only an advanced version of risk management and compliance solution. It also utilises cloud technologies, machine learning, big data analysis to integrate and analyze banking data. Its solutions include identifying, predicting, and mitigating risks to the organisation.  According to the results of the study, the increase in the number of non-cash transactions in the state and the excess of payments made via the internet or mobile phone over the traditional POS terminal indicate the high role of digital technologies in the development of the country's banking sector.