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Article: RegTech: Technology-driven compliance and its effects on profitability, operations, and market structure
| Title | RegTech: Technology-driven compliance and its effects on profitability, operations, and market structure |
|---|---|
| Authors | |
| Issue Date | 13-Feb-2024 |
| Publisher | Elsevier |
| Citation | Journal of Financial Economics, 2024, v. 154 How to Cite? |
| Abstract | Compliance-driven investments in technology—or “RegTech”—are growing rapidly. To understand the effects on the financial sector, we study firms’ responses to new internal control requirements. Affected firms make significant investments in ERP and hardware. These expenditures then enable complementary investments that are leveraged for noncompliance purposes, leading to modest savings from avoided customer complaints and misconduct. IT budgets rise and profits fall, especially at small firms, and acquisition activity and market concentration increase. Our results illustrate how regulation can directly and indirectly affect technology adoption, which in turn affects noncompliance functions and market structure. |
| Persistent Identifier | http://hdl.handle.net/10722/340085 |
| ISSN | 2023 Impact Factor: 10.4 2023 SCImago Journal Rankings: 13.655 |
| DC Field | Value | Language |
|---|---|---|
| dc.contributor.author | Charoenwong, Ben | - |
| dc.contributor.author | Kowaleski, Zachary T | - |
| dc.contributor.author | Kwan, Alan | - |
| dc.contributor.author | Sutherland, Andrew G | - |
| dc.date.accessioned | 2024-03-11T10:41:33Z | - |
| dc.date.available | 2024-03-11T10:41:33Z | - |
| dc.date.issued | 2024-02-13 | - |
| dc.identifier.citation | Journal of Financial Economics, 2024, v. 154 | - |
| dc.identifier.issn | 0304-405X | - |
| dc.identifier.uri | http://hdl.handle.net/10722/340085 | - |
| dc.description.abstract | <p>Compliance-driven investments in technology—or “RegTech”—are growing rapidly. To understand the effects on the financial sector, we study firms’ responses to new internal control requirements. Affected firms make significant investments in ERP and hardware. These expenditures then enable complementary investments that are leveraged for noncompliance purposes, leading to modest savings from avoided customer complaints and misconduct. IT budgets rise and profits fall, especially at small firms, and acquisition activity and market concentration increase. Our results illustrate how regulation can directly and indirectly affect technology adoption, which in turn affects noncompliance functions and market structure.</p> | - |
| dc.language | eng | - |
| dc.publisher | Elsevier | - |
| dc.relation.ispartof | Journal of Financial Economics | - |
| dc.title | RegTech: Technology-driven compliance and its effects on profitability, operations, and market structure | - |
| dc.type | Article | - |
| dc.identifier.doi | 10.1016/j.jfineco.2024.103792 | - |
| dc.identifier.volume | 154 | - |
| dc.identifier.eissn | 1879-2774 | - |
| dc.identifier.issnl | 0304-405X | - |