Regulation technology popularly known as RegTech is a process that involves the digitalization and automation of regulatory governance, risk, and compliance operations within the financial industry. The main functions of the RegTech software application include monitoring, reporting, and maintenance of financial risk and compliance efficiently with less operational cost.

Regtech compliance software applications are used to monitor, detect, validate, and eliminate potential risks and fraud activities in the financial system. They help regulated entities to become fully compliant and secure through risk profiling and categorization to prevent anti-money laundering, terror financing, and identity spoofing activities.

Digital KYC is an online “Know Your Customer” remote verification and authentication process that allows individuals to validate their proof of identity. It is a paperless, contactless, and branchless process that enables fast and frictionless user onboarding. Digital KYC can be carried out using online KYC forms, video-based identity verification, Aadhaar-based eKYC integration, etc approved by the Reserve Bank of India.

Customer identification procedure (CIP) is the Reserve Bank of India mandated process for banks and regulated entities to verify and authenticate the customer identity through reliable documents or data or information. Financial regulated entities need to carry out this procedure while onboarding new customers and during their financial transactions to avoid fraud and money laundering.