New compliance regulations concerning digital disruption and data privacy protection are driving opportunities for a new type of startup -- regulatory technology (regtech) -- in Thailand.
"Regtech is a combination of technology and regulations to address regulatory challenges," said Athistha Chitranukroh, a partner at Tilleke & Gibbins.
Speaking at Startup Thailand 2018, she said regulatory technology solutions increase efficiency in compliance, time and cost reduction, reducing operational risks associated with regulatory obligations such as transaction reporting and training.
In addition, there are tools for regulatory gap analysis and compliance monitoring/authentication, and reporting and training tools including data management for transactions, contracts and cases of litigation.
The research conducted by CB Insights shows that in 2017 there were 148 disclosed deals related to equity funding with total value exceeding US$1 billion (32.2 billion) in regtech.
FundApps, a UK-based regtech application, wraps regulatory information in a cloud-based service to manage compliance services catering to asset managers, hedges funds and institutional investors under the pay-per-use model.
In Thailand there is only one regtech player, iTax, an income tax management application, said Ms Athistha.
"The Know-Your-Customer screening process and customer due diligence process are growing regtech's potential, as they are required for many anti-money laundering and financial transaction activities," she said.
Ms Athistha said the EU's General Data Protection Regulation and other personal data privacy acts are requiring greater customer consent in terms of data usage.
The company has also studied investing in artificial intelligence to fully automate legal compliance services, like legal database-as-a-service, she said.
Amphornphan Veerapong, assistant director of the fintech department at the Securities and Exchange Commission (SEC), said there were around 50,000 cases of compliance worth $1 billion estimated annually from 2008-2015.
Citing the Monetary Authority of Singapore, Ms Amphornphan said the next generation of regtech is supervisory technology (suptech), which helps regulators better monitor businesses.
This suptech facilitates data digitisation, operational procedures and regulatory process automation.
Suptech covers real-time compliance supervision, financial centre development, consumer complaint oversight, feedback collection on policy effectiveness, market manipulation monitoring, insider trading supervision and policy harmonisation.
"The SEC has facilitated and worked with fintech and other stakeholders to embrace the regulatory sandbox to allow fintech to test new services to minimise risks and encourage innovation," she said.