Blockchain Technology Plays Pivotal Role in the RegTech Revolution

The Regulatory Technology (RegTech) in financial services encompasses digital services on big data, biometrics, artificial intelligence, and machine learning to comply with regulatory requirements more effectively. And this industry is projected to cross $127 billion per year by 2024.

Blockchain offers many advantages that help boost RegTech evolution. It allows transparency because of its improved security via cryptography, distributed ledger, enhanced record-keeping, and faster and cost-effective through automation.

Here some uses of blockchain technology in the RegTec industry:

Regulatory Fund Management

Smart contracts offer a significant advantage because of automation and the ability to incorporate the essential aspects of regulatory reporting and comply with a fund’s regulatory norms in real-time.

Record Keeping

The vast amount of information collected by big data can create a collection of unstructured data that have no use. RegTech companies implement blockchain technology to address this issue by producing data that is transparent and using a distributed ledger to make it obtainable for internal use, protect from frauds, and document for audit purposes.

Anti-Money Laundering, Client Onboarding, and Fraud Prevention

Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations for onboarding clients can be challenging for financial institutions as they need to gather their data on possible clients before they begin doing business. Also, they need to update the data regularly for existing counterparties, which is expensive and can take a lot of time. Banks can implement universal ledgers to distinguish their customers, track transactions, and identify fraud.

Many RegTech companies offer cryptocurrency firms solutions to help authenticate identity quickly and cost-effectively build on improved data analytics or biometrics in compliance with comprehensive regulations.


Monitoring transactions increases the transparency that blockchain offers because of the growing use of virtual currencies for money laundering. Additionally, it provides better traceability and quicker analysis when assets are digitalized.

Bradley Peterson currently serves as Executive Vice President and Chief Technology and Chief Information Officer (CTO/CIO) for Nasdaq. Before Nasdaq, he served as CIO and EVP for Schwab Technology Services (STS), responsible for Schwab’s technology innovation, development, infrastructure and operations.

He also has held senior executive positions at companies including Epoch Partners, Schwab, Pacific Bell Wireless and Pacific Telesis (now part of AT&T). He earned his master’s degree in management at MIT Sloan School of Management and a bachelor’s degree in systems science and economics at the University of California, Los Angeles (UCLA)

Tell us a bit about your background, and your interest in financial technology.

I’ve spent the bulk of my career working in technology and product engineering across telecom, e-commerce and financial service industries. I’ve been fascinated by how payments and transactions have developed over the years and seeing innovation happen in this space. I’ve been fortunate to have been involved in many of these new developments.

How well are financial companies adapting to the rapid pace of FinTech development? What fields are furthest ahead of the game, and what sectors are being left behind?

The financial industry has been very bullish on embracing fintech development, particularly companies that work on the B2C side — companies that developed the original ATM networks, debit card services, 24/7 access to our money and buying power. The adoption of the Internet and web services brought new innovations like PayPal and Amazon’s 1-Click in payments and online investing for many others, while mobile has given us another wave of innovation with services like Venmo and the ability to make transactions with smartphones and other devices. More broadly, I think the leading financial services innovators have done a relatively good job of incorporating the latest wave of communications innovations into new services for their customers.

What challenges do you see for FinTech development and disruption, both from a user’s perspective and from a regulatory standpoint?

The biggest challenge remains the need for more innovations in security protections and security enhancements. From the point of view of smaller fintech start-ups, there is the extra consideration in their business model to adhere to the current regulatory framework in their respective industry. For financial services start-ups, there’s a lot to consider in how you innovate, including how you assess and develop new technology.

What is your overall take on the present and future of blockchain?

We’ve seen blockchain being initially embraced by the B2C financial services world. There is a growing need for modernization in all corners of the financial services sector in terms of infrastructure and how operational systems work. And blockchain has been the biggest catalyst for studying and innovating our collective approach to modernizing essential record keeping functions of our industry. This is a multi-year, massive project. And I see blockchain technology having a key part in this new, exciting development.

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