Guide

Auditing your regtech vendors

Regtech vendors sell tools that automate compliance work: transaction monitoring, sanctions screening, identity checks, regulatory reporting, and more. Buying one does not transfer accountability. If the tool misses a sanctioned party or misfiles a report, the regulatory consequence lands on you, not the vendor. That is why auditing a regtech vendor is different from auditing an ordinary supplier: you are testing the reliability of a control you have effectively delegated.

Ask for evidence, not assurances

Marketing claims are not audit evidence. Ask for the artifacts that prove the controls work: independent audit reports such as SOC 2, penetration test summaries, model documentation, data lineage, and the vendor own change management records. For a screening or monitoring tool, request details on how rules and thresholds are set, tuned, and tested, and how false positives and negatives are measured. Vague answers here are a finding in themselves.

Test the outputs you rely on

Where you can, validate the tool against known cases. Feed in scenarios with expected results and confirm the system catches them. Review how alerts are generated, escalated, and closed, and whether the audit trail would satisfy an examiner. Confirm the vendor tells you promptly about model updates, rule changes, and outages, since those can quietly shift the behavior of a control you depend on every day.

Document the audit trail

Examiners want to see that you tested your regtech tools, not just bought them. A single-file dashboard from The Protocol Collective organizes your vendor control claims, evidence requested and received, test results, and open findings against the public frameworks that govern these tools. You own it outright, paid once and updated for life, built from public frameworks so each control maps clearly back to its source.

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General information about compliance and program structure, not regulatory, legal, tax or financial advice, and no promise of any examination or audit outcome. Built from public frameworks.