Global RegTech Industry: Adoption of New Technologies to Achieve Compliance Efficiency

 Global RegTech Industry: Adoption of New Technologies to Achieve Compliance Efficiency

The Global RegTech Market is estimated to be USD 7 Bn in 2021 and is expected to reach USD 15.8 Bn by 2026, growing at a CAGR of 17.5%.

Key factors promoting the growth of the market are the rising number of fraudulent activities such as money laundering taking place in the financial sector. This has required a need for risk and compliance management system, especially for large scale organizations. Besides, the adoption of Regulatory Technology (Reg Tech) software can also be effective in reducing compliance costs by speeding up the business processes and increasing the organization’s overall efficiency.

The high cost of the software and the regulatory discrepancies across different regions are likely to hamper the growth of the market.

RegTech Market Dynamics


  • The Rising Number of Fraudulent Activities
  • The Increasing Need for Risk and Compliance Management
  • The Growing Cost of Compliance
  • Need for Faster Transactions


  • The High Cost of Software
  • Regulatory Divergence
  • Lack of Technical Knowledge about the Software Deliverable


  • Adoption of New Technologies to Achieve Compliance Efficiency
  • Government Initiatives for the Adoption of Reg Tech
  • Mandatory Application of the General Data Protection Regulation (GDPR) Guidelines
  • Application of Reg Tech for Non-Finance Industries


  • Privacy of Consumer Data
  • Implementation Challenges due to Incompatible Systems

RegTech Segments

By Component, the Solutions segment holds the largest market share. The demand for the Reg Tech solutions is increasing with the growing incidences of money laundering followed by non-compliance in the wake of changing regulatory scenario. These solutions can help businesses to run effectively through their Software-as-a-Service (SaaS) offerings and use of the latest technologies like cloud computing or AI, etc. These solutions also have intelligent process automation systems that can speed up routine activities while minimizing human errors.

By Application, Regulatory Intelligence holds the largest market share. Regulatory intelligence gathers publicly available regulatory information that can be used for monitoring the regulatory environment. This has helped the financial institutions manage according to the changing regulatory environment and minimize the risks related to non-compliance. Further, the application of analytics in financial institutions can help make informed decisions on regulatory grounds adding to the segmental growth.

By Deployment, the market is classified as On-premises and Cloud-based. The Cloud-based segment holds the largest market share during the forecast period. Especially, in today’s data-driven world, the implementation of Reg Tech solutions is highly improved with cloud-based solutions by utilizing analytics and data surveillance. Cloud-based solutions are scalable, easy to use across users, and are cost-effective.

By Organization Size, the market can be classified as large enterprises and Small and Medium-sized Enterprises (SMEs). Amongst the two, the Large Enterprises hold the highest market share. These large enterprises, also characterized by publicly traded companies, have to abide by the changing regulatory scenario. Due to their organization size and operations, manual implementation of these procedures is not quite feasible. Thus, these organizations are assisted by various consulting vendors to provide Reg Tech services for ensuring adherence to regulatory guidelines.

By Vertical, the Banking and Capital Markets holds the largest market share as these institutions are known to operate in a regulated environment. Thus, they are highly exposed to the adoption of an ever-changing regulatory scenario. In many cases, they also face hefty fines for non-compliance measures. With the rise in strict compliance guidelines across many regions, these institutions are adopting Reg Tech software to simplify the process and reduce compliance-related costs.

By Geography, North America leads the market during the forecast period. With a robust technological infrastructure in place, the region has been an early adopter of Artificial Intelligence (AI), Machine Learning (ML), and Blockchain. Thus, they have also seen faster deployments of these technologies for reducing compliance costs. Moreover, the rising necessity for adherence to regulatory compliance has been an influential factor for the industry and market growth in this region.

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