About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Global RegTech Industry Tops $5bn, But More Collaboration is Needed

Subscribe to our newsletter

The global RegTech industry generated an estimated $5 billion in revenue last year, as regulatory changes and technological advancements drove a surge of new startups in the past five years – according to a new Global RegTech Industry Benchmarking Report released this week by the Cambridge Centre for Alternative Finance (CCAF).

Sponsored by EY Japan (with field research supported by the International RegTech Association and the Australia-based RegTech Association), the study found that as of 2018, RegTech firms employed an estimated 44,000 people globally, having raised about $9.7 billion in external funding to date. About 60% of all RegTech vendors in the CCAF research sample were founded between 2014 and 2018, while 82% had their first funding round during this period.

Unsurprisingly, the report found that the industry is already highly international, with fewer than one-third of RegTech vendors active in just one market and over a third present in five or more jurisdictions. Nearly two-thirds of vendors had a physical presence or significant market share in the UK, and nearly half have the same in the US.  There is also significant activity in Australia, Canada, Singapore, Hong Kong, Japan, Luxembourg, Switzerland, Ireland, Germany and France.

At the core of the industry lie a few key technologies – including the cloud, natural language processing, machine learning, and big data analytics. Notably, the survey also found that data demands drive innovation – with RegTech solutions most strongly in demand from firms that have to report large volumes of data to standard formats for supervisory purposes, or those that face substantial fines or criminal sanctions as a result of non-compliance with specific regulations.

Profiling is the largest segment of the market by funds raised to date, followed by due diligence and dynamic compliance. The largest share of turnover was claimed by firms in the reporting and dashboards and risk analytics segment.

However, challenges still face the industry – including long sales cycles, complex IT planning within client institutions, difficulties in establishing trust, and high levels of competition – which have left some vendors struggling to gain traction.

A handful of larger vendors have so far dominated most funding and commercial activity; but half of those surveyed in the report had raised less than $1.6 million; while over a quarter had received no formal external funding. A solution to this could be a move towards partnerships, co-creation with clients and collaboration with other start-ups, suggested CCAF.

“The findings point to a rapidly growing and technology-enabled global industry serving an increasingly diversified customer base, yet still working to establish trust and credibility as it matures,” says Bryan Zhang, CCAF Executive Director.

“A variety of key players, including regulated companies, regulators, technology start-ups, and research institutions, can contribute to each other and mutually benefit, and further drive innovation in the entire society,” adds Keiko Ogawa, Partner and Regtech Leader at EY Japan.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Best practice approaches to trade surveillance for market abuse

Breaches of market abuse regulation can lead to reputational damage, eye-watering fines and, ultimately, custodial sentences of up to 10 years. Internally, market abuse triggers scrutiny of traders and trading behaviours; externally it can undermine confidence in markets and cause financial instability. This webinar will discuss market abuse of different types, such as insider trading...

BLOG

ICE Launches Global Sanctions Monitoring Service

Intercontinental Exchange (ICE) has launched a sanctions monitoring service to help financial institutions comply with the increasingly complex landscape of global sanctions. The new service leverages ICE’s extensive data offering, cross-referencing and linkage capabilities to identify securities, entities and groups targeted by sanctions programmes. ICE’s sanctions data covers financial and economic restrictive measures against entities...

EVENT

Data Management Summit London

Now in its 14th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2023 – Eleventh Edition

Welcome to the eleventh edition of A-Team Group’s Regulatory Data Handbook, a popular publication that covers new regulations in capital markets, tracks regulatory change, and provides advice on the data, data management and implementation requirements of more than 30 regulations across UK, European, US and Asia-Pacific capital markets. This edition of the handbook includes new...