Global Regulatory Technology (RegTech) Market: Drivers, Restraints, Opportunities, Trends, and Forecast up to 2023

Overview:

The banks and financial institutions operate in a highly regulated environment and continuously face new regulations to prevent money laundering and restrict terrorist funding. Banks spend hefty amount due to fines and penalties for non-compliance with regulations. The annual spending of the financial institutions for non-compliance issues is more than $100 billion. The FinTech industry, over the last couple of years, has realized the need and opportunity of RegTech software. The RegTech vendors offer software to simplify the implementation of regulations for financial institutions.

Market Revenue and Segmentation Analysis:

The global RegTech market revenue is estimated to be $2,321.5 million in 2018 and is expected to reach $7,207.6 million by 2023, growing at a CAGR of 25.4% during the forecast period 2018–2023. The solutions include compliance management, reporting, identity management, and risk management. The compliance management solution segment is expected to grow at the highest CAGR during the forecast period. The solutions help organizations in key compliance areas and risk aversion for AML, KYC, MiFID II, Basel III, PSD 2, Solvency II, and AIFMD. The traditional compliance tools are not found to be effective to respond to regulatory changes in recent times. With the major focus of governments across regions with GDPR guidelines, RegTech is expected to majorly impact the financial service organizations. With an increased focus on data protection rules, organizations need to strictly adhere to compliances and monitor transparency in money transactions as laid down by the regulatory bodies to avoid huge penalties. Many RegTech vendors have partnered with GRC vendors to enhance their reach to the market and clients.

The adoption of RegTech is the highest in Europe owing to strict and mandatory rules and directives for financial transactions and data protection. The cloud deployment mode offers enterprises to opt for SaaS on a subscription basis as per usage rather than incurring costs on hardware and infrastructure. The Asia Pacific region holds a huge potential for the vendors and is expected to grow at the highest CAGR during the forecast period 2018–2023. The Asia Pacific region is expected to witness growth in RegTech due to the presence of a few emerging countries and financial hubs in Hong Kong, Singapore, and India.

The organization size includes large enterprises and SMEs. The large enterprises are estimated to hold the significant market share in 2018, however, SMEs are expected to grow at higher CAGR. The cloud migration of SMEs is comparatively easier than large enterprises, which is driving the growth of SaaS adoption. The organizations are deploying RegTech solutions because of the increasing focus to expedite regulatory operations and manually reduce the complexities for risk assessment.

Regions Analysis:

The regions covered in the report are North America, Europe, Asia Pacific, Middle East Africa, and Latin America. The countries covered are the US, Canada, Germany, the UK, France, Netherlands, Switzerland, China, India, Australia, Japan, Singapore, Israel, United Arab Emirates (UAE), Brazil, and Mexico.

Benefits and Vendors

The report contains an in-depth analysis of vendor profiles, which include overview and offerings; and competitive landscape. The emergence of technologies, such as AI, ML, and automation, is impacting the market growth and organizations are adopting RegTech solutions for accurate document verifications, quick data insights, and to reduce risk vulnerability. The companies profiled in the report are Algoreg, Clarus, Reportix, NEX Regulatory Reporting, Lombard Risk, Ayasdi, Featurespace, Abside Smart Financial Technologies, Fintellix Solutions, Promapp, NetGuardians, AML Partners, EastNets, OpusDatum, and AXIOMSL.

The study offers a comprehensive analysis of the “global RegTech market”. Bringing out the complete key insights of the industry, the report aims to provide an opportunity for companies to understand the latest trends, current market scenario, government initiatives, and technologies related to the market. In addition, it helps the venture capitalists in understanding the companies better and take informed decisions.

Table of Contents

1     Industry Outlook 
1.1        Industry Overview
1.2        Industry Trends
1.3        PEST Analysis

2     Report Outline 
2.1        Report Scope
2.2        Report Summary
2.3        Research Methodology
2.4        Report Assumptions

3     Market Snapshot 
3.1        Total Addressable Market
3.2        Segmented Addressable Market
3.3        Related Markets

4     Market Outlook 
4.1        Overview
4.2        Porter 5 (Five) Forces

5     Market Characteristics 
5.1        Evolution
5.2        Market Segmentation
5.3        Market Dynamics
5.3.1     Drivers
5.3.1.1 Enhanced focus on financial regulations 
5.3.1.2 Europe region to adopt regulatory software at fast rate 
5.3.1.3 To enhance transparency and monitor banking transactions 
5.3.2     Restraints
5.3.2.1 The RegTech software vendors are operating in a new evolving market
5.3.2.2 Organizations are looking for solutions with proven use cases 
5.3.3     Opportunities
5.3.3.1 Application of AI and machine learning in better identifying the potential of financial threats and risks  23
5.3.3.2 Growing GDPR concerns across regions to compel financial institutions to adopt regulatory software to ease out processes 
5.3.4     DRO – Impact Analysis
6     Solutions: Market Size & Analysis 

6.1        Overview
6.2        Solutions
6.2.1     Compliance Management
6.2.2     Reporting
6.2.3     Identity Management
6.2.4     Risk Management

7     Deployment Mode: Market Size & Analysis 
7.1        Overview
7.2        On-premises
7.3        Cloud

8     Organization Size: Market Size & Analysis 
8.1        Large Enterprises
8.2        SMEs

9     Region: Market Size & Analysis 
9.1        Overview
9.1.1     Market Size and Analysis
9.2        North America
9.2.1     US
9.2.2     Canada
9.3        Europe
9.3.1     Germany
9.3.2     UK
9.3.3     France
9.3.4     Netherlands
9.3.5     Switzerland
9.3.6     Rest of Europe
9.4        Asia Pacific
9.4.1     China
9.4.2     India
9.4.3     Australia
9.4.4     Japan
9.4.5     Singapore
9.4.6     Rest of Asia Pacific
9.5        Middle East & Africa
9.5.1     Israel
9.5.2     United Arab Emirates (UAE)
9.5.3     REST of MEA
9.6        Latin America
9.6.1     Brazil
9.6.2     Mexico
9.6.3     Rest of Latin America

10  Companies to Watch for 
10.1     Algoreg
10.1.1  Overview
10.1.2  Offerings
10.2     Clarus
10.2.1  Overview
10.2.2  Offerings
10.3     Reportix
10.3.1  Overview
10.3.2  Offerings
10.4     NEX Regulatory Reporting
10.4.1  Overview
10.4.2  Offerings
10.5     Lombard Risk
10.5.1  Overview
10.5.2  Offerings
10.6     Ayasdi, Inc.
10.6.1  Overview
10.6.2  Offerings
10.7     Featurespace Limited
10.7.1  Overview
10.7.2  Offerings
10.8     Abside Smart Financial Technologies
10.8.1  Overview
10.8.2  Offerings
10.9     Fintellix Solutions
10.9.1  Overview
10.9.2  Offerings
10.10  Promapp
10.10.1 Overview
10.10.2 Offerings
10.11  NetGuardians, Inc.
10.11.1 Overview
10.11.2 Offerings
10.12  AML Partners
10.12.1 Overview
10.12.2 Offerings
10.13  EastNets
10.13.1 Overview
10.13.2 Offerings
10.14  OpusDatum Ltd
10.14.1 Overview
10.14.2 Offerings
10.15  AXIOMSL, Inc.
10.15.1 Overview
10.15.2 Offerings

11  Competitive Landscape 
11.1     Competitive Comparison Analysis

Annexure 

Abbreviations

Infoholic research works on a holistic 360° approach in order to deliver high quality, validated and reliable information in our market reports. The Market estimation and forecasting involves following steps:

  • Data Collation (Primary & Secondary)
  • In-house Estimation (Based on proprietary data bases and Models)
  • Market Triangulation
  • Forecasting

infoholic Research Methodology

Market related information is congregated from both primary and secondary sources.

Primary sources involved participants from all global stakeholders such as Solution providers, service providers, Industry associations, thought leaders etc. across levels such as CXOs, VPs and managers. Plus, our in-house industry experts having decades of industry experience contribute their consulting and advisory services.

Secondary sources include public sources such as regulatory frameworks, government IT spending, government demographic indicators, industry association statistics, and company publications along with paid sources such as Factiva, OneSource, Bloomberg among others.

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