Name
Global FinTech Guide
Country _ Name
Czech Republic
SectionTitle
RegTech and compliance management
Body
RegTech is composed of the words “regulatory” and “technology”. It is a collective term for the application of modern technologies, to get the increasing regulation in the banking- and financial sector under control both from an IT and a legal standpoint.

Introduction

Attitude of the country towards RegTech-services

In general, the attitude towards RegTech is positive – see e.g. activities of the Association for Communication tools and IoT (https://www.ctit.cz/en/fintech/regtech-2/). Nonetheless, there obviously are also concerns about whether new innovative solutions will not have a negative impact on data protection, consumer protection etc.

Legal affairs

Obligations and requirements to provide RegTech-services

At the moment, RegTechs are not subject to specific “RegTech-dedicated” legislation. In some cases, since the RegTech products only support the provision of regulated services, they are even expressly excluded from the scope of the respective legislation (see e.g. ZPS, which excludes from its scope services/activities of technical service providers that support the provision of payment services).

However, an assessment of the legal requirements needs to be conducted in each case based on the specific business model.

Also, not only may RegTechs need to comply with general legislation, incl. data protection regulations or anti-money laundering regulations (if their product concerns AML), in some cases, they will be directly or indirectly regulated by financial regulations laying down rules and conditions under which financial entities may outsource their activities to the third parties (regulated outsourcing).

Additional comments regarding the legal situation for RegTech-services or what RegTech’s must be aware of in this business area

N/A.

Economic conditions

Market size for RegTech-services and biggest companies in this business area

Currently, no reliable statistics are available for the Czech market. However, several small-/medium-sized companies from RegTech sector operate in the Czech Republic, mainly in the areas of compliance and risk management (incl. AML), identity management, regulatory reporting, fraud management, and regulatory intelligence (see e.g. TRASK SOLUTIONS).

Additional comments regarding the economic situation for RegTech-services or what RegTech’s must be aware of in this business area

N/A.

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