FinregE: Banks must fix data gaps before buying RegTech

Regulatory intelligence firm FinregE is urging financial institutions to take a hard look at their data governance before adding more regulatory technology. The firm argues that a widespread data ownership gap is undermining the effectiveness of billions earmarked for compliance systems.

In its guidance, FinregE stresses that many banks treat RegTech as a silver bullet, but the technology depends on underlying data being clean, well-documented, and clearly owned. Fragmented data environments and ambiguous accountability mean that even sophisticated tools can produce unreliable results.

The consequences go beyond wasted spending. Regulators are increasingly demanding more detailed and frequent reporting, and poor data ownership can lead to errors, missed obligations, and heightened scrutiny. FinregE says banks must confront these operational risks head-on.

As a first step, the firm recommends establishing explicit data responsibility and improving lineage before new purchases. FinregE believes that fixing the data foundation will make existing and future RegTech investments more effective, ultimately lowering compliance costs and strengthening the institution's control framework.