Global Regulatory Technology Market

Regulatory technology or RegTech enables financial institutions to handle varying regulatory requirements and thus, reduces the risks and cost associated with non-compliance. Banks and financial institutes have to carry out their activities in a highly regulated environment. New regulations regarding the prevention of money laundering and terror funding keep coming from time to time. This requires constant monitoring, without which one has to incur hefty amounts in fines and penalties for non-compliance.

Financial institutions have to spend more than $100 billion annually for non-compliance issues. Regulatory technology helps banks and financial institutions to comply with regulations easily and thus, reduces the risk of non-compliance. It also provides critical insights that help them make informed decisions about regulatory compliance.

Regulatory technology solutions include compliance management, reporting, identity management, and risk management. Among these, the compliance management segment is expected to grow at the highest CAGR in the near future.

The global RegTech market was valued at $2,321.5 million in 2018 and is expected to reach $7,207.6 million by 2023. The market will grow at a CAGR of 25.4% during this period. The growth of the global market will be fuelled by increased cost of compliance and adoption of the regulatory sandbox approach.  

With increased focus on data protection rules, the demand for RegTech will see an upward trajectory, as organizations will have to strictly adhere to compliances and monitor transparency in financial transactions. Banks and financial institutions are focusing on implementing data protection rules and government policies, in order to ensure transparency in their financial transactions.

North America is expected to hold the largest market share in the global regulatory technology market in the coming years. North America is known to be an early adopter of many technologies including RegTech solutions. Financial institutions are adopting RegTech solutions to reduce their compliance cost by using advanced technologies like AI, ML, BigData, and cloud computing.

Moreover, countries in North America like the US and Canada have stringent regulations which compel banks and financial institutions to adopt modern technologies to comply with these regulations. This is expected to boost the global regulatory technology market.

Europe is another region that has enforced stringent and mandatory rules and directives for financial transactions and data protection. This is the reason why the adoption of RegTech is high in Europe. Apart from North America and Europe, the Asia-Pacific region also has tremendous growth potentials. In the coming years, the region is expected to grow at the highest CAGR.

Some major players that are operating in the global regulatory technology market are, IBM, Deloitte, Alto Advisory, Cube, Ayasdi, Abside Smart Financial Technologies, ACTICO, Compendor, Jumio, Fenergo, Thomson Reuters, Wolters Kluwer, NetGuardians Inc., OpusDatum Ltd., and Infrasoft Technologies Ltd. The companies providing RegTech solutions are focusing on data analytics applications, automation of manual processes, digitization, and improvement in data quality.