In an era where generative AI has become a double-edged sword, the Philippine financial sector is facing an invisible enemy. Cybercriminals are no longer just sending simple phishing emails; they are deploying ‘deepfake’ identities and sophisticated algorithms to breach even the most storied institutions.
To counter these threats, the industry is turning to RegTech — short for Regulatory Technology.
Defined by the World Economic Forum as the application of technological solutions to manage regulatory governance and risk, RegTech is more than just a buzzword.
It serves as the automated backbone of modern finance, designed to minimize risk and slash compliance costs in a landscape where AI-driven impersonation and financial fraud have become a common reality.
The early adopters: Setting the pace
The movement began as a quiet ripple.
In 2019, Unawa emerged as a local pioneer, digitizing the friction-filled world of audits, records, and complex document approvals. But as the complexity of financial crime grew, so did the need for more specialized reinforcements.
By 2022, Singaporean giant Tookitaki entered the fray. Recognizing a soaring local demand for sophisticated anti-money laundering (AML) solutions, the firm recently escalated its commitment by opening a strategic satellite office in Manila. This expansion is part of a broader mission to curb the rising tide of financial crime across Southeast Asia using cutting-edge technology.
“AI-driven solutions and a federated approach to fighting financial crime help firms detect complex fraud patterns and uncover hidden risks,” says Abhishek Chatterjee, founder and CEO of Tookitaki. His vision reflects a pivotal industry shift: moving away from reactive, manual checks toward a proactive, machine-led defense that can outpace modern cybercriminals.
Beyond human speed: Why automation is non-negotiable
In the Philippines, where digital banking is booming, the stakes are high. RegTech offers a multi-layered shield that manual processes simply cannot match:
- Real-time vigilance: Unlike manual audits that look backward, RegTech provides continuous monitoring, flagging suspicious transactions the moment they occur.
- Agility in compliance: As regulations evolve, RegTech frameworks update automatically, allowing local firms to launch new products without getting bogged down in legal red tape.
- The efficiency dividend: By automating mundane data entry and verification, institutions can redirect their human talent toward strategic growth rather than paperwork.
The arsenal: KYC, AML, and digital identity
The RegTech toolkit is diverse.
AML Automation utilizes “Intelligent Automation” — a mix of AI and Machine Learning — to flag high-risk individuals.
Meanwhile, Know Your Customer (KYC) processes have evolved into “Agentic Automation,” where AI agents orchestrate business processes to verify identities with surgical precision.
As the industry moves toward “the automation of everything,” experts like iProov warn that static verification is dead.
In the face of ever-evolving identity fraud, the Philippine fintech sector must adopt continuous, real-time threat detection. In the battle for financial security, staying still is the same as falling behind.
Why the need for RegTech?
Financial institutions in the Philippines need to push for RegTech now more than ever – especially with the increasing trend of financial crimes.
RegTech provides advanced risk assessment and continuous monitoring, to ensure that financial institutions can identify and respond quickly to potential risks more effectively. It also detects risks faster, allowing the organizations to take preventative measures on the spot.
It offers real-time monitoring and updates to compliance frameworks to keep everything running smoothly. All customer activity can be tracked on their platform, to ensure a high level of trust with customers, regulators, and other stakeholders.
It allows financial institutions to launch new products or services faster while maintaining a good level of quality or compliance with regulations, since regulatory processes are streamlined.
It also reduces overhead expenses significantly since it relies on automating processes. Because of this, this eliminates the need for manual labor, which in turn, reduces the time spent on manual tasks such as data entry and reduces the risk of human error.
It enables teams to focus on more strategic initiatives instead of spending time on mundane tasks, since those same tasks are automated.
It is equipped to handle sensitive information and provides secure, efficient, and compliant data storage.
It can also address compliance changes proactively, ensuring that the businesses remain compliant in an ever-evolving industry.
The RegTech solutions
RegTech provides various solutions in order to curb the ever-increasing threat of financial crime and fraudulent activities, from financial risk and capital management, to regulations related to financial crime.
Anti-money laundering (AML) automation uses intelligent automation (IA) solutions to monitor, flag and manage compliance tasks for an organization. It includes technologies like robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), optical character recognition (OCR), and more to perform AML tasks. It also helps flag high-risk individuals or identify suspicious transactions.
Know-your-customer (KYC) automation, on the other hand, uses workflow automation to deploy vertical AI agents into business processes. It is a form of agentic automation – wherein it combines AI, RPA, and BPM (business process management) to organize, automate and orchestrate business processes.
Other solutions RegTech provides include transaction monitoring, where financial transactions are continuously analyzed to detect, report and manage potentially suspicious activity, as well as digital identity verification, where it confirms and authenticates people’s online identity to combat fraud.
The automation of everything
iProov warns that traditional, static approaches to identity verification are no longer sufficient, instead, organizations are to adopt continuous identity threat detection systems that can adapt in real time. Cybercrimes like identity fraud are ever-evolving, and as such, many organizations have to step up their A-game.
Manual labor is not as effective as it used to be, as cybercriminals can find holes and exploits to further advance their crimes and damage the financial sector. As time passes by, many organizations, especially financial firms, have to adopt automation not only to reduce the risk of having their securities breached, but as well as to prepare themselves for an inevitable future.
