Staying on top of regulation and compliance is a considerable challenge for those in the business of managing human capital. This is particularly the case in Asian business hubs like Singapore, where international firms face the ongoing challenge of keeping up with home country regulations, while also needing to comply with local employment laws. Similarly, many small-to-medium sized companies operating in places like Singapore often lack the in-house resources to ensure they are complying with regulations.
Fortunately, the tech space has an answer with IT solutions now being offered in the “RegTech” space. The finance sector has already been changed by RegTech and now it is HR’s turn.
What is RegTech?
But what does RegTech really mean? Just like FinTech, InsureTech, and any other combinations of XTech, RegTech is another great example of an industry that is being deeply and significantly changed by software.
RegTech goes beyond the simple development and adoption of new technologies that facilitate the delivery of regulatory requirements. It is a technological advancement that helps HR professionals navigate compliance challenges to make better, faster, and more informed decisions, and more efficiently monitor compliance and regulatory obligations.
The Link Between HRTech & RegTech
The link between HRTech and RegTech is quickly growing, thanks to the increased awareness of its importance by international firms and SMEs alike.
Three areas which can benefit from the link between HRTech and RegTech include:
1. Recruitment and Selection Compliance: Although the fundamental principle of recruitment will always be matching top talent to the job, certain laws place obligations on hiring, such as those around workplace diversity. RegTech offers solutions to the challenge of adhering to recruitment compliance.
2. Workplace Health and Safety Compliance: Occupational safety is one of the key risk management and regulatory compliance focus areas among organisations of all sizes. HR professionals are not commonly expected to understand all the technical aspects of occupational safety. RegTech can automate reporting and flag applicable rules, ensuring compliance obligations are met and risk is minimised.
3. Data Protection Compliance: In Singapore the PDPA (Personal Data Protection Act) is an example of a local law which impacts on HR compliance. RegTech can assist the HR function of a business to comply with local data laws such as the PDPA.
What’s happened over the last 12 months in Asia
Much like the rest of the world, in Asia the RegTech landscape is rapidly evolving and covers a wide range of possible services, such as vendor risk management, cybersecurity and identity and background checks.
Local players are also starting to appear in Asia. Notable start-ups include Fintellix, an Indian firm that leverages existing data infrastructures to manage local regulatory reporting rules; and Cynopsis Solutions, a start-up from Singapore that specialises in transaction monitoring to combat money laundering and terrorism-related financial activities.
Trends to note
There are several trends to note in the HRTech and RegTech spaces. Huge investment is pouring into HR technology solutions. A regular topic in tech circles is also Blockchain. Blockchain transactions can be applied to virtually anything, like personal data, work history, or financial details. An interesting trend to watch will be the impact that blockchain has on the cybersecurity of HR data.
Data security is increasingly a topic for concern. Tech vendors need to find and adopt measures to keep the data that clients trust them with intact and secure; companies need to put systems and procedures in place to ensure the data is correctly managed and processed. This will be a dominant trend in the tech industry, and existing HR solutions will need a lot of reworking to give people more control over their data.
In November 2019, Singapore will host its annual Fintech Festival. This international conference is often the platform for launching new technology initiatives. RegTech has featured in past agendas, and it will be interesting to see note HRTech discussions at the festival next month.
In summary, RegTech can now be added to the suite of technology that enables HR professionals to attract, retain, and manage their people, and stay on the right side of regulation and compliance. No matter the size of their business, HR leaders across Asia and beyond, stand to benefit from these advances in regulatory technology.
Coming to the blog soon, we’ll look at the mobility of the workforce and how that impacts on the HR function, and the landscape in human capital management beyond 2020. And follow the conversation @RMItwitter for our insights from Singapore Fintech Festival directly as we share the latest as it happens on the ground.