A new study conducted by Juniper Research predicts a substantial increase in global spending on regulatory technology (regtech) by financial institutions and other industries. According to the study, regtech spend is projected to rise by 124% between 2023 and 2028, reaching a staggering $207 billion.
The surge in regtech spending can be attributed to the growing complexity of regulatory requirements, which is pushing corporations to adopt innovative technologies that facilitate compliance. One notable trend is the use of shared blockchain ledgers to enhance anti-money laundering efforts and fraud compliance in cryptocurrency exchanges. Additionally, natural language processing is being leveraged to identify malicious actors in emails and phone calls, effectively uncovering misconduct, conflicts of interest, and financial crimes. As more organizations embrace these advanced technologies, we can expect to see a significant increase in enterprise investments as they recognize the immense efficiencies that regtech can offer.
Regtech, a subset of fintech, focuses specifically on technologies that enable the delivery of regulatory requirements more efficiently and effectively than existing capabilities.
To shed light on the leading regtech vendors, Juniper Research also released its Competitor Leaderboard for 2023. The rankings were determined using a robust scoring methodology that evaluated factors such as solution innovation, industry support, and future business prospects. The top five vendors for 2023 were identified as follows: Encompass; Socure
Feedzai; Chainalysis; Fenergo.
These top vendors stood out by offering streamlined identity verification processes automated by artificial intelligence (AI). Additionally, they successfully positioned themselves across various industries, demonstrating that regtech is expanding beyond the realm of financial services. In order to maintain their competitive edge, regtech vendors must continue to develop solutions that harness the power of AI and machine learning, particularly in automating processes like identity verification.
By leveraging AI, the most successful regtech vendors can reduce the manual workload required by compliance teams, allowing them to focus on tasks that require human judgment. This not only lowers costs but also significantly increases productivity, which is particularly valuable in a time of heightened cost pressures.
As the world becomes increasingly regulated, organizations across industries are recognizing the need for efficient and effective compliance solutions. The projected surge in regtech spending, coupled with the adoption of AI and machine learning, presents a promising future for the industry, paving the way for enhanced regulatory compliance and streamlined operations on a global scale.