Part 1: Foundations of RegTech

Chapters 1–5

"Before you can automate compliance, you have to understand what compliance is for."

Why This Part Exists

Every technology solution for regulatory compliance rests on a foundation of assumptions — about what regulations require, about how financial systems work, about what data is available and reliable, and about what technology can and cannot do. When those assumptions are wrong, the technology fails — not because the code is broken, but because the problem was misunderstood.

Part 1 is about getting those foundations right.

The five chapters in this part cover distinct but interlocking territory. Chapter 1 asks the definitional question: what is RegTech, where did it come from, and why does it matter? Chapter 2 maps the regulatory landscape that RegTech solutions must navigate — the agencies, the frameworks, the rule-making processes, and the political economy of financial regulation. Chapter 3 surveys the ecosystem: the vendors, the investors, the incumbents, and the dynamics that shape what solutions are available. Chapter 4 establishes the technology vocabulary — AI, machine learning, NLP, automation — and maps each technology to the compliance problems it addresses. Chapter 5 digs into the data infrastructure question, because every RegTech solution is only as good as the data it runs on.

Characters Introduced in Part 1

Maya Osei arrives in Chapter 1 on her first day as CCO of Verdant Bank, facing a KYC backlog that regulators have already flagged. She will spend the first four chapters getting her bearings — understanding her regulatory obligations, assessing the technology available, and beginning to form a plan.

Rafael Torres appears in Chapter 1 already eighteen months into a multi-year compliance technology transformation at Meridian Capital. He is dealing with a system that works well enough to pass audits but not well enough to trust.

Priya Nair enters in Chapter 1 returning from a client presentation that did not go well — not because the analysis was wrong, but because the client wasn't ready to hear it. She will spend Part 1 thinking about how to bridge the gap between technical analysis and organizational readiness.

Cornerstone Financial Group is introduced in Chapter 2, as we use its balance sheet and regulatory structure to make abstract concepts about regulatory architecture concrete.

Learning Objectives for Part 1

By the end of Part 1, you will be able to:

  1. Define RegTech and explain its emergence from the convergence of compliance burden and technology capability
  2. Map the principal regulatory agencies and frameworks relevant to financial services compliance
  3. Describe the RegTech vendor landscape and distinguish between major market segments
  4. Identify which technology approaches are appropriate for which compliance problems
  5. Explain the data governance requirements that underpin effective RegTech implementation
  6. Apply the compliance technology maturity model to assess an organization's current state

Technical Preview

The code in Part 1 is relatively light — this is foundational territory. Chapter 4 introduces Python in the context of compliance data processing. Chapter 5 demonstrates data quality checking and lineage tracking. Heavier code appears starting in Part 2, when we work with actual transaction monitoring and KYC verification systems.

Continue to Chapter 1 →

Chapters in This Part