Chapter 15: Regulatory Technology (RegTech) Landscape of Bangladesh: Policies and Practices

Purpose: This study examines the regulatory technology (RegTech) policies and practices in Bangladesh, highlighting barriers due to the slow adoption of RegTech and identifying opportunities amid the growing state of financial technology (FinTech).

Need for the Study: In response to the escalating complexity and volatility of regulatory requirements after the 2008 global financial crisis (GFC), RegTech has emerged worldwide. It harnesses the power of cutting-edge technologies to automate compliance, monitor regulatory changes, and provide real-time risk assessments. The development of RegTech solutions in developing countries is still in its nascent stages, and Bangladesh seems to be no exception.

Methodology: This study employs a secondary data-based research design, collecting data from the annual reports of the Bangladesh Financial Intelligence Unit (BFIU) and various commercial banks from 2017 to 2021. The data analysis employs descriptive statistics and content analysis to measure FinTech growth and assess the effectiveness of RegTech policies adopted by banks.

Findings: The study found a 657% increase in registered users from 2014 to 2022, with transactions rising from BDT104.83 billion to BDT961.33 billion. Bangladesh has enacted strong policies against illicit financial activities, indicating that it is in the early RegTech 2.0 stage focusing on regulatory compliance.

Practical Implications: The analysis reveals that Bangladesh’s lag in RegTech adoption, which exacerbates money laundering and suspicious transactions due to the increased use of FinTech. Regulatory authorities should enhance technology, enforce policies, and raise awareness to detect financial non-compliance.