The Global State of RegTech

May 15, 2020

According to a new market research report by MarketsandMarkets™, the global RegTech Market size is expected to grow from USD 6.3 billion in 2020 to USD 16.0 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 20.3%. 

 

The major drivers for the RegTech Market include the increased cost of compliance, rising need for faster transactions, regulatory sandbox approach to support RegTech innovations, and lower entry barriers with Software as a Service (SaaS)-based offerings.

 

The large enterprises segment is expected to hold a higher market share, as most publicly traded companies are compelled to adopt regulatory programs. Additionally, as rules and regulations keep altering as per industry and region, keeping a check on all the processes manually is not feasible, which further emphasizes on the importance of RegTech solutions and services.

 

Service and consulting vendors, such as Deloitte, IBM, PwC, and Thomson Reuters assist large enterprises to realize the benefits of efficiently managing their business functions in accordance to the compliance mandates by enabling them to effectively implement RegTech solutions as per their business requirements.

 

As per the geographic analysis, North America is estimated to hold the highest market share during the forecast period. This is due to the early adoption of RegTech solutions by the North American financial institutions to reduce compliance cost by leveraging advanced technologies, such as Artificial Intelligence (AI), Machine Learning (ML), blockchain, big data, and cloud computing.

 

North America constitutes of developed economies, such as the US and Canada. These countries are significantly advanced in terms of technology and its application deployments. Stringent regulations and the need to comply with them are expected to drive the market growth in North America.

 

However, one should not ignore the growing importance of APAC on the market. Asia presents itself as an opportunity for many. It is a rather unique market with many inconsistencies in regulations with decentralised markets so there is many opportunities for RegTech applications.

 

The coming years will likely see many Asian RegTech startups grow as well as big players making a move into Asia. As these markets are decentralised, interoperability could be the next big thing for RegTech

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