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The road to RegTech: the (astonishing) example of the European Union


  • Ross P. Buckley

    (UNSW Sydney)

  • Douglas W. Arner

    (University of Hong Kong)

  • Dirk A. Zetzsche

    (University of Luxembourg

  • Rolf H. Weber

    (University of Zurich)


Europe’s road to RegTech has rested upon four apparently unrelated pillars: (1) extensive reporting requirements imposed after the Global Financial Crisis to control systemic risk and change in financial sector behaviour; (2) strict data protection rules reflecting European cultural concerns about data privacy and protection; (3) the facilitation of open banking to enhance competition in banking and particularly payments; and (4) a legislative framework for digital identification to further the European Single Market. The paper analyses these four pillars and suggests that together they are underpinning the development of a RegTech ecosystem in Europe and will continue to do so. We argue that the European Union’s financial services and data protection regulatory reforms have unintentionally driven the use of regulatory technologies (RegTech) by intermediaries, supervisors and regulators, and provided an environment within which RegTech can flourish. The experiences of Europe in this process will provide insights for other societies in developing their own RegTech ecosystems in order to support more efficient, stable, inclusive financial systems.

Suggested Citation

  • Ross P. Buckley & Douglas W. Arner & Dirk A. Zetzsche & Rolf H. Weber, 2020. "The road to RegTech: the (astonishing) example of the European Union," Journal of Banking Regulation, Palgrave Macmillan, vol. 21(1), pages 26-36, March.
  • Handle: RePEc:pal:jbkreg:v:21:y:2020:i:1:d:10.1057_s41261-019-00104-1
    DOI: 10.1057/s41261-019-00104-1

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    References listed on IDEAS

    1. Arner, Douglas W & Barberis, Janos & Buckley, Ross P, 2016. "The Emergence of RegTech 2.0: From Know Your Customer to Know Your Data," Journal of Financial Transformation, Capco Institute, vol. 44, pages 79-86.
    2. Hossein Nabilou & André Prüm, 2019. "Ignorance, Debt, and Cryptocurrencies: The Old and the New in the Law and Economics of Concurrent Currencies," Journal of Financial Regulation, Oxford University Press, vol. 5(1), pages 29-63.
    3. Weber, Rolf H., 2017. "Regtech as a new legal challenge," Journal of Financial Transformation, Capco Institute, vol. 46, pages 10-17.
    4. Ringe, Wolf-Georg & Ruof, Christopher, 2018. "A Regulatory Sandbox for Robo Advice," ILE Working Paper Series 14, University of Hamburg, Institute of Law and Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item


    Data protection; Digital identity; FinTech; European Union; Financial regulation; General Data Protection Regulation (GDPR); Open banking; Payment Services Directive 2 (PSD 2); RegTech;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance


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