RegTech Market Size - By Component (Solution, Services), By Deployment Model (On-premises, Cloud), By Application (Risk Management, Compliance Management, Regulatory Reporting, Identity Management, Regulatory Intelligence), By Vertical & Forecast, 2024 - 2032

RegTech Market Size - By Component (Solution, Services), By Deployment Model (On-premises, Cloud), By Application (Risk Management, Compliance Management, Regulatory Reporting, Identity Management, Regulatory Intelligence), By Vertical & Forecast, 2024 - 2032

RegTech Market Size

RegTech Market size was valued at USD 9.3 billion in 2023 and is estimated to register a CAGR of over 18% between 2024 and 2032. The surge in extension funding rounds for RegTech startups is fueling product innovation, driving growth in the market. With increased investment, startups can enhance their product offerings, develop cutting-edge technologies, and expand their market reach.

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For instance, in April 2024, Dot Compliance, a prominent RegTech startup, disclosed that it secured USD 17.5 million in a Series B funding round. This funding signifies a notable increase in valuation and elevates the total investment in the company to USD 50 million. The investment round was jointly spearheaded by current backers IGP Capital and Vertex Ventures, with supplementary contributions from TPY Capital.

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Financial institutions and organizations face an increasingly complex and evolving regulatory landscape, with new regulations being introduced regularly and existing ones undergoing frequent updates. This has led to a significant increase in the number of regulatory requirements and compliance obligations. RegTech solutions help organizations stay up to date with these changes, streamline compliance processes, automate reporting, and manage regulatory changes more effectively, reducing the burden and risks associated with non-compliance.
 

Data security and privacy concerns are significant challenges for the regtech market as these solutions often handle sensitive and confidential data, including personal information, financial records, and regulatory compliance data. Any breach or mishandling of this data could lead to severe consequences, such as regulatory penalties, legal liabilities, and damage to an organization's reputation. Ensuring robust data security measures, adhering to data privacy regulations, and maintaining the highest level of data protection are crucial for gaining trust and widespread adoption of RegTech solutions.

RegTech Market Trends

AI-powered regtech solutions are driving growth in the RegTech industry by offering advanced capabilities to streamline compliance processes. These solutions leverage artificial intelligence to automate tasks, enhance risk detection, and improve efficiency in regulatory compliance. For instance, in February 2024, NAPIER AI secured USD 56 million in funding from Crestline Investors to support ongoing expansion in AI-driven financial crime compliance. Napier unveiled the investment from Crestline Investors, an alternative asset manager based in the U.S., to further propel its growth momentum, underscoring the transformative period in the industry for KYC and AML solutions.

With the growing importance of data privacy and cybersecurity regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), there has been an increased focus on developing RegTech solutions specifically tailored to address these compliance requirements. These solutions help organizations manage data protection, consent management, breach notification, and other critical aspects of data privacy and cybersecurity, mitigating risks and ensuring regulatory compliance. This trend presents a significant growth opportunity for RegTech providers in this domain.

RegTech Market Analysis

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Based on component, the market is divided into solution and services. Solution segment is expected to hold over USD 29.5 billion revenue by 2032. The increasing demand for operational efficiency is driving growth in the RegTech solutions market. Businesses seek streamlined processes to meet regulatory requirements effectively and reduce costs.

For instance, in September 2023, Safexpay launched APIX, a RegTech platform offering diverse API solutions. APIX streamlines banking, payment, and document verification processes within a unified framework, simplifying multiple API integrations for businesses. This comprehensive solution enhances operational efficiency by addressing the complexities of disparate API sources. RegTech solutions offer automation, data analytics, and integration capabilities, enabling organizations to enhance compliance processes, mitigate risks, and optimize operations.

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Based on deployment model, the regtech market is categorized into on-premises and cloud. The cloud segment accounted for a market share of over 75% in 2023. The scalability and flexibility of cloud-based regtech solutions enable businesses to adjust resources based on demand, accommodating fluctuations in compliance needs efficiently. This scalability ensures organizations can scale operations as needed, adapting to evolving regulatory requirements and business growth seamlessly.

Additionally, cloud deployment offers cost efficiency by eliminating upfront infrastructure investments and reducing maintenance costs. With pay-as-you-go pricing models, businesses can optimize spending, benefiting from a more predictable cost structure and improved financial management within the RegTech industry.

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North America dominated the global regtech market with a major share of over 33% in 2023. In North America, increasing compliance costs and a focus on technological advancements are driving the market. Businesses face rising expenses associated with regulatory complexity and enforcement, prompting the demand for cost-effective regtech solutions to streamline compliance processes and reduce operational overheads.

Concurrently, the region's strong ecosystem of startups, tech giants, and venture capital firms fosters innovation in regtech, particularly in areas such as artificial intelligence, machine learning, and cloud computing. This emphasis on technology adoption fuels the development and adoption of advanced regtech solutions, positioning North America as a key hub for regulatory technology innovation.

RegTech Market Share

Broadridge Financial Solutions and NICE Actimize hold a significant share of over 18% in the RegTech industry. Broadridge Financial Solutions and NICE Actimize's dominance is attributed to their robust offerings, extensive industry experience, and strategic partnerships. Broadridge's comprehensive suite of RegTech solutions covers various regulatory compliance aspects, including risk management, data governance, and reporting. Meanwhile, NICE Actimize specializes in financial crime prevention and compliance solutions, leveraging advanced analytics and AI to detect and mitigate financial risks and fraud.

Additionally, both companies continually invest in research and development, innovation, and client support, maintaining their competitive edge and driving market leadership in the rapidly evolving regulatory technology landscape. Their established reputation, diverse product portfolios, and focus on customer success position them as key players in shaping the future of RegTech solutions.

RegTech Market Companies

Major companies operating in the RegTech industry are

• Broadridge Financial Solutions
• NICE Actimize
• Accuity
• Fenergo
• Trulioo
• Infrasoft Technologies
• Jumio 
• IBM
• Deloitte

RegTech Industry News

• In March 2024, London-headquartered regtech firm Global Screening Services (GSS) successfully raised approximately USD 47 million in a Series A2 funding round, marking its official transition into operational mode. GSS notes that this new funding aligns with the company's shift from the development phase to full-scale operations, as it gears up to launch its initial client services.
   
• In November 2023, Flagright restated its dedication to enhancing AML compliance through the introduction of AI Forensics. Developed in direct response to the increasing intricacy and sophistication of money laundering endeavors, Flagright’s AI Forensics strives to deliver a resilient compliance solution that stays abreast of these evolving challenges.
   

The regtech market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments

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Market, By Component

• Solution
• Services

Market, By Deployment Model

• On-premises
• Cloud

Market, By Application

• Risk management
• Compliance management
• Regulatory reporting
• Identity management
• Regulatory intelligence

Market, By Vertical

• Banks
• Insurance companies
• Non-Financial enterprises

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Russia
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA

Authors Preeti Wadhwani

Frequently Asked Questions (FAQ)

How much is the RegTech market worth?

The market size of RegTech reached USD 9.3 billion in 2023 and will grow at over 18% CAGR between 2024 and 2032, led by the surge in extension funding rounds for RegTech startups.

Why is the demand for RegTech solutions rising?

The solution component segment will cross USD 29.5 billion by 2032, driven by the increasing demand for operational efficiency.

Why is RegTech showcasing growth in North America?

North America RegTech industry held a revenue share of over 33% in 2023, driven by increasing compliance costs and a strong focus on technological advancements.

Who are the major RegTech market players?

Broadridge Financial Solutions, NICE Actimize, Accuity, Fenergo, Trulioo, Infrasoft Technologies, Jumio , IBM, and Deloitte among others.