The RegTech Market is projected to reach USD 23.6 billion by 2029, at a CAGR of 16.5% during the forecast period 2022-2029. The growing number of fraudulent activities, the increasing need to automate regulatory compliance processes, and the rising need for faster transactions are the key factors driving the growth of the RegTech market. However, the high costs of RegTech solutions/dashboards restrain the growth of this market. The growing popularity of automated regulatory compliance and identity verification solutions by the online gaming industry and the increasing demand for risk & regulatory compliance solutions by the pharmaceutical industry are expected to provide lucrative opportunities for the growth of the global RegTech market. However, the implementation of RegTech regulatory change poses serious challenges to adopting RegTech solutions.
Impact of COVID-19 on the RegTech Market
The outbreak of the COVID-19 pandemic adversely impacted the global economy. Lockdowns and quarantine restrictions across several countries negatively affected multiple industries, including the RegTech industry. Uncertainty regarding the duration of the lockdowns made it difficult for the key market players to anticipate the recovery of the RegTech market. Many RegTech providers were under immense pressure on various fronts due to the outbreak of the COVID-19 pandemic. At present, economies are shifting their focus from responding to the pandemic to economic recovery; hence, various growth opportunities are expected to emerge for the players operating in the RegTech market due to the surge in demand for regulatory compliance solutions.
Different leading RegTech providers leveraged strong portfolios of RegTech solutions and enhanced product capabilities during the pandemic, consequently promoting the RegTech market's growth. For instance:
- In 2022, MetricStream, Inc. (U.S.) launched its ConnectedGRC solutions to address business challenges related to risk, compliance, audit, cyber risks, and environmental, social, governance (ESG).
- In 2019, Broadridge Financial Solutions, Inc. (U.S.) launched its Broadridge Data Control Intelligent Automation, a new artificial intelligence (AI) and machine learning (ML) platform built to be deployed across industry-wide reconciliation, matching and exception management applications.
- In 2019, Refinitiv Limited (U.K.) launched its mobile onboarding solution that will help financial institutions comply with the latest Know-Your-Customer (KYC) and anti-money laundering (AML) regulations with Trulioo Technology.
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The rising need for faster transactions is expected to drive the market growth
Over the past few years, financial institutes and banks have faced various issues associated with traditional cross-border payment systems, such as extra processing fees, risks of fraud in payment pathways, security breaches, and increasing failure points. Additionally, sending a global payment through established banking channels is a complex and multistep process due to the involvement of several intermediaries. To resolve these issues, blockchain-based payment systems provide a faster, secure, and cheaper payment method by streamlining the transaction process and storing every transaction in a secure distributed ledger. Furthermore, the rising need for faster transactions is encouraging consumers to deploy RegTech solutions, thereby fueling the growth of the RegTech market.
Prominent players are emphasizing launching blockchain-based compliance solutions to facilitate faster transactions. For instance,
- In 2022, Sopra Steria (Paris) partnered with Chainalysis Inc. (U.S.) to bring leading blockchain compliance solutions to customers across Europe.
- Furthermore, in 2022, Cogent Bank (U.S.) launched a fully integrated digital banking platform powered by Tassat Group Inc. (U.S.). This platform provides real-time payment facilities safely, securely, and in compliance with banking regulations. Thus, exerting efforts by companies to launch blockchain-based solutions to promote faster transactions is stimulating the growth of the RegTech market.
Key Findings in the Global RegTech Market Study:
In 2022, the platforms/solutions/dashboards segment is expected to dominate the RegTech market
Based on component, the global RegTech market is segmented into solutions/platforms/dashboards and services. In 2022, the solutions/platforms/dashboards segment is expected to account for the largest share of the RegTech market. The large market share of this segment is attributed to the increasing emphasis by leading RegTech players to launch money laundering and financial crime management solutions, the growing need to monitor regulatory changes, monitor risk, generate reports for compliance departments, and the growing benefits offered by RegTech solutions such as improved risk management, and centralized regulatory filings.
The cloud deployment segment is expected to register the highest CAGR during the forecast period
Based on deployment mode, the cloud-based deployments segment is expected to register the highest CAGR during the forecast period. Efforts by RegTech providers to launch cloud-based RegTech offerings, the increasing need for cloud-based RegTech solutions for processing large amounts of data to identify risks and enhance controls, the growing benefits offered by centralized data storage, and the increasing need to reduce internal system design, implementation, and ongoing maintenance costs are factors expected to support the growth of this segment.
The BFSI segment to register at the highest CAGR during the forecast period
Based on end user, the BFSI segment is expected to register the highest CAGR during the forecast period. Efforts by several companies to launch compliance solutions to simplify and expedite the compliance process for banking and financial instructions, the increasing product launches for financial crimes intelligence, and the increasing demand for building risk-based compliance programs are expected to support the growth of this segment.
Asia-Pacific: The fastest growing regional market
In 2022, Asia-Pacific is expected to register the highest CAGR in the global RegTech market, followed by Latin America, the Middle East & Africa, North America, and Europe. The rapid growth of this region is mainly driven by the rising demand for effective digital payment services, the well-established presence of fintech hotspots, the growing emphasis on virtual currencies like cryptocurrency, heavy investments in fintech projects in China, a favorable Indian government initiative which supports the development of the RegTech solutions, region’s startups and tech community in financial services, and the growing emphasis of leading companies to provide risk & compliance solutions.
Key Players
The report includes a competitive landscape based on an extensive assessment of the key strategic developments adopted by the leading market participants in the RegTech industry over the last four years. The key players profiled in the global RegTech market are NICE Ltd. (Israel), Broadridge Financial Solutions, Inc. (U.S.), Deloitte Touche Tohmatsu Limited (U.K.), IBM Corporation (U.S.), Wolters Kluwer N.V. (Netherlands), Ascent Technologies Inc. (U.S.), SymphonyAI Sensa LLC (U.S.), Chainalysis Inc. (U.S.), cleversoft group GmbH (Germany), Corlytics (Ireland), DataCo GmbH (Germany), Hummingbird RegTech, Inc. (U.S.), Jumio Corporation (U.S.), MetricStream Inc. (U.S.), MindBridge Analytics Inc. (Canada), Pole Star Space Applications Limited (U.K.), REGnosys Limited (U.K.), and Trulioo Information Services Inc. (Canada).
Scope of the Report
RegTech Market, by Component
- Solutions/Platforms/Dashboards
- Anti-money Laundering and Counter-terrorist Financing Solutions
- Fraud Prevention Solutions
- Prudential Reporting Solutions
- ICT Security Tools
- Creditworthiness Assessment Tools
- SupTech Solutions
- Services
- Professional Services
- Managed Services
RegTech Market, by Application
- Regulatory Compliance
- Risk Management
- Financial Crime Management
- Identity Management/Identification & Background Checks
- Compliance Support
- Cybersecurity/Information Security
- Onboarding Verification
- Transaction Monitoring
RegTech Market, by Organization Size
- Small & Medium-sized Enterprises
- Large Enterprises
RegTech Market, by Deployment Mode
- On-premise Deployments
- Cloud-based Deployments
RegTech Market, by Technology
- Cloud Computing
- Predictive Data Analytics
- Data Transfer Protocols
- Natural Language Processing
- Semantics/Graph Analysis
- Biometrics
- Blockchain
- Machine Learning
- Deep Learning
- Robotic Process Automation
- Other Technologies
RegTech Market, by End User
- Healthcare
- BFSI
- Retail
- IT & Telecommunications
- Government & Public Sector
- Transportation & Logistics
- Food & Beverage
- Manufacturing
- Other End Users
RegTech Market, by Geography
- North America
- Europe
- Germany
- U.K.
- France
- Italy
- Spain
- Netherland
- Switzerland
- Rest of Europe
- Asia-Pacific
- Japan
- China
- India
- South Korea
- Singapore
- Taiwan
- Australia and New Zealand
- Rest of Asia-Pacific
- Latin America
- Mexico
- Brazil
- Rest of Latin America
- Middle East & Africa
- UAE
- Israel
- Rest of Middle East & Africa
Key questions answered in the report: