“Global RegTech Market to reach a market value of USD 56 Billion by 2031 growing at a CAGR of 21.1%”
The Global RegTech Market size is expected to reach $56 billion by 2031, rising at a market growth of 21.1% CAGR during the forecast period.
The Asia Pacific region's financial institutions and regulatory bodies are increasingly adopting RegTech solutions to enhance compliance, mitigate risks, and streamline operations. The growing adoption of digital banking, fintech innovations, and mobile payment systems further drives the region's demand for advanced compliance and regulatory technologies. Consequently, the Asia Pacific region would acquire nearly 30% of the total market share by 2031.
The major strategies followed by the market participants are Partnerships as the key developmental strategy to keep pace with the changing demands of end users. For instance, in November, 2023, Jumio Corporation has partnered with Suits Me Limited, a Financial Services company, to help underbanked UK customers open accounts without traditional photo ID through rapid identity verification. This collaboration streamlines account opening, providing features like cashback and multilingual personal account managers in just under three minutes. Moreover, in January, 2022, Trulioo formed a partnership with PassFort, a global provider of software-as-a-service regulatory technology solutions. Together, the companies aimed to provide enterprises to digitally upgrade KYC as well as KYB procedure, across the world. Additionally, this partnership would offer worldwide coverage and flexibility, to adapt and perform onboarding and risk observation of any product as well as any type of consumer anywhere from the globe.
Based on the Analysis presented in the KBV Cardinal matrix; IBM Corporation is the forerunner in the Regtech Market. In July, 2020, IBM formed a partnership with Ascent, a provider of AI-based solutions. Through this partnership, the companies aimed to combine RegTech solutions to help financially as well as banks sectors to manage to increase and growing administrative needs. Additionally, the integration of the Ascent platform with OpenPages with Watson which capitalized on natural language procedure and AI algorithms to recognize and analyze beyond 1.5 million paragraphs of directorial text from the country’s industries in Financial Instruments Directive II. Companies such as Thomson Reuters Corporation, Wolters Kluwer N.V., Broadridge Financial Solutions Inc. are some of the key innovators in Regtech Market.
Innovations in artificial intelligence (AI), machine learning (ML), blockchain, and big data analytics are significantly enhancing the capabilities of RegTech solutions, making them more effective in monitoring, reporting, and ensuring compliance. Blockchain can facilitate secure and efficient information sharing among regulatory bodies, financial institutions, and other stakeholders, streamlining the compliance process. Hence, the advancements in AI, ML, blockchain, and big data analytics are driving the demand for RegTech.
The surge in regulations and compliance is driven by various factors, including the need to enhance consumer protection, prevent financial crimes, and ensure market stability. Regulations such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States and the General Data Protection Regulation (GDPR) in Europe impose strict guidelines on handling, storing, and sharing patient data. Thus, the increasing regulatory requirements across various industries are driving the adoption of RegTech solutions.
While RegTech solutions promise long-term cost savings and significant efficiency gains, the initial investment required for these technologies can be substantial, presenting a significant barrier to adoption. Maintenance of RegTech systems represents another ongoing expense. Hence, the high initial costs and concerns about ROI present significant barriers to adoption.
On the basis of application, the RegTech market is classified into risk & compliance management, AML & fraud management, identity management, regulatory reporting, and regulatory intelligence. The AML & fraud management segment garnered 21% revenue share in the RegTech market in 2023. This segment addresses the growing need for effective tools to combat money laundering and financial fraud, which are significant concerns for financial institutions and regulators.
On the basis of organization size, the RegTech market is fragmented into large enterprises and small & medium enterprises (SMEs). The small & medium enterprises (SMEs) segment acquired 23% revenue share in the RegTech market in 2023. The growing affordability and accessibility of RegTech solutions, particularly cloud-based offerings (RaaS - RegTech as a Service), is driving adoption among SMEs.
Based on deployment mode, the RegTech market is segmented into cloud and on-premise. The on-premise segment garnered 42% revenue share in the RegTech market in 2023. Many businesses, particularly large enterprises and those in highly regulated industries continue to prefer on-premise deployments. On-premise RegTech solutions offer greater control over data and systems, which is crucial for organizations that handle highly sensitive information or operate in jurisdictions with strict data privacy regulations.
Based on component, the RegTech market is bifurcated into solution and services. The services segment procured 28% revenue share in the RegTech market in 2023. This segment includes consulting, implementation, support, and maintenance services that help businesses integrate and optimize their RegTech solutions. While technological tools are essential, their successful deployment and utilization often require expert guidance and support.
By vertical, the RegTech market is divided into banking & capital markets, insurance, and non-financial. The insurance segment recorded 36% revenue share in the RegTech market in 2023. Regulatory bodies are placing greater emphasis on solvency and risk management within the insurance sector. RegTech solutions help insurers streamline compliance processes and manage risk profiles effectively. Insurance companies are constantly developing new products, which can lead to compliance challenges.
Free Valuable Insights: Global RegTech Market size to reach USD 56 Billion by 2031
Region-wise, the RegTech market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment recorded 38.9% revenue share in the RegTech market in 2023. The region's strong financial services industry and highly developed regulatory framework have created a fertile ground for adopting RegTech solutions. Furthermore, North America is home to several of the world's most prominent technology companies and startups that are at the vanguard of the development of innovative RegTech solutions.
The RegTech market is fiercely competitive, driven by increasing regulatory requirements and the demand for compliance automation across industries. Key players like IBM, Thomson Reuters, and Wolters Kluwer continuously innovate to offer advanced solutions for risk management, regulatory reporting, and compliance. Emerging startups such as ComplyAdvantage and Chainalysis challenge established firms by leveraging AI and blockchain technologies. This competitive landscape fosters rapid technological advancements, making it crucial for companies to differentiate through superior analytics, real-time monitoring capabilities, and user-friendly platforms. As regulations evolve, the race to provide the most efficient and comprehensive RegTech solutions intensifies.
| Report Attribute | Details |
|---|---|
| Market size value in 2023 | USD 12.4 Billion |
| Market size forecast in 2031 | USD 56 Billion |
| Base Year | 2023 |
| Historical Period | 2020 to 2022 |
| Forecast Period | 2024 to 2031 |
| Revenue Growth Rate | CAGR of 21.1% from 2024 to 2031 |
| Number of Pages | 387 |
| Number of Tables | 687 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Porter’s 5 Forces Analysis, Company Profiling, Companies Strategic Developments, SWOT Analysis, Winning Imperatives |
| Segments covered | Component, Organization Size, Deployment Mode, Vertical, Application, Region |
| Country scope |
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| Companies Included | ACTICO GmbH, Jumio Corporation, MetricStream, Inc., NICE Ltd., Thomson Reuters Corporation (The Woodbridge Company), Wolters Kluwer N.V., IBM Corporation, Deloitte Touche Tohmatsu Limited, Broadridge Financial Solutions Inc. and Trulioo, Inc. |
By Component
By Application
By Organization Size
By Deployment Mode
By Vertical
By Geography
This Market size is expected to reach $56 billion by 2031.
Enhanced capabilities supported by technological advancements are driving the Market in coming years, however, High initial costs and ROI concerns restraints the growth of the Market.
ACTICO GmbH, Jumio Corporation, MetricStream, Inc., NICE Ltd., Thomson Reuters Corporation (The Woodbridge Company), Wolters Kluwer N.V., IBM Corporation, Deloitte Touche Tohmatsu Limited, Broadridge Financial Solutions Inc. and Trulioo, Inc.
The expected CAGR of this Market is 21.1% from 2023 to 2031.
The Cloud segment led the Market by Deployment Mode in 2023; thereby, achieving a market value of $35 Billion by 2031.
The North America region dominated the Market by Region in 2023, and would continue to be a dominant market till 2031; thereby, achieving a market value of $20.7 Billion by 2031.
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