Deborah Young
CEO, The RegTech Association
When we think about regulatory technology (regtech) and why it’s so important, it’s good to reflect on its purpose. It protects the regulated system and its participants as well as consumers who are demanding trust in a digital world.
Regtech is about adding a layer of trust using technology to enhance processes; aid productivity; identify users; produce superior reporting that can surface risks earlier; and provide more transparent and better-quality data.
Developing helpful solutions with regtech
So, how does one, in a sea of software vendors, determine what the right technology is — fit for their use case, budget and infrastructure? Ecosystem collaboration is key — bringing regulators, regulated entities and technologists together to identify the areas of greatest need and develop products and services that can support the integration of regtech at an accelerated pace.
The RegTech Association was founded in 2017 as a member-based nonprofit, which commits to this acceleration of regtech adoption and provides the platform for the ecosystem to collaborate. It supports this by researching and showcasing — through global cooperation with industry associations, regulators and institutions.
Customers driving demand for regtech
Through our research over the last two years, we have seen the emergence of institutions’ customers driving the demand for regtech. More demand for faster, safer digital products and services, as well as choices of providers, have a direct correlation with the environment, social and governance impacts and decisions that customers will make.
Regulatory interest in regtech is at an all-time
high with 80% of regulatory respondents in the
last survey having onboarded regtech.
One of the biggest misconceptions about regtech is that this is startup territory. That is largely not the case; experienced ex-industry practitioners make up the bulk of the regtech industry. These founders know the problems firsthand, are deep subject matter experts and, seven years ago, were bootstrapping the establishment of the early wave of regtechs.
Regtech growth and relevance
Pleasingly, we are now seeing more professional capital flowing into the sector, and 36% of the members of The RegTech Association experienced 10–30% revenue growth in 2023. Regulatory interest in regtech is at an all-time high with 80% of regulatory respondents in the last survey having onboarded regtech or suptech (regulatory use cases of regtech) in the last 12 months.
Finally, is regtech actually fintech? We don’t find muddling the two is helpful. Regtech’s customers are financial services (including fintechs) and any other regulated industry.
If you’d like a copy of our latest research or want to know more about The RegTech Association, regtechglobal.org has the mailing list link. Industry Perspectives Report 2023 will be published in early December 2023.