RegTech Market is expected to reach US$ 42.73 billion by 2030

RegTech Market Forecast to 2030: Key Insights

According to our latest study on "RegTech Market – Global and Regional Share, Trend, and Growth Opportunity Analysis – by Component, Deployment Type, Enterprise Size, Application, and Industry Vertical," the RegTech market size was valued at US$ 7.55 billion in 2022 and is projected to reach US$ 42.73 billion by 2030; it is projected to record a CAGR of 24.2% from 2022 to 2030. Various factors are expected to contribute to the RegTech market growth over the forecast period. Firstly, the increase in regulatory requirements across healthcare, banking, financial services, and insurance (BFSI); manufacturing; and other industries has led to the need for efficient regulatory technology solutions. RegTech helps businesses comply with regulations and streamline their regulatory activities. Moreover, the rapid adoption of artificial intelligence (AI), machine learning (ML), natural language processing (NLP), big data, cloud computing, and other advanced technologies has played a significant role in driving the market. Additionally, increasing preference for such technologies mentioned above across the globe is expected to bring new RegTech market trends in the coming years.   

The Asia Pacific RegTech market is segmented into Japan, China, South Korea, India, Australia, and the Rest of Asia Pacific. Asia Pacific is witnessing significant investments in digital transformation and the adoption of innovative technologies. The rapid development of domestic businesses, extensive infrastructure development, and a surge in GDP in various countries facilitate the market expansion. Over the past four years, the internet economy in Asia alone has experienced remarkable growth, with its size increasing more than threefold to reach a value of US$ 100 billion in 2019. This growth can be attributed to countries such as Malaysia, Thailand, Singapore, and the Philippines, which have witnessed annual growth rates ranging from 20% to 30%. Thus, the aforementioned trends are anticipated to propel the RegTech market in the coming years.

RegTech Market

In terms of revenue, China dominated the Asia Pacific RegTech market share in 2022. China has been a significant recipient of foreign direct investment, which indicates investor confidence in the country's business environment and regulatory climate. FDI plays a major role in driving the RegTech market in China, as it fosters economic development, links national economies, and creates opportunities for both capital suppliers and host regions. Moreover, the growing occurrence of fraudulent activities, such as money laundering and phishing, creates a need for robust regulatory technology solutions. RegTech solutions help financial institutions and organizations combat fraud, enhance risk management, and ensure compliance with regulatory standards. The need to address these challenges drives the demand for RegTech solutions in China.

The India RegTech market is poised for substantial growth due to several key factors. India, as one of the fastest-growing economies in the world, is experiencing rapid digital infrastructure expansion. As businesses move online, there is a growing need for digital solutions, including RegTech solutions, that can help them comply with regulatory requirements. Moreover, the rapid adoption of technology and digital transformation across industries in India creates huge awareness of the need for effective regulatory compliance. As organizations expand internationally and interact with diverse regulatory frameworks, the demand for RegTech solutions increases. All these factors are supporting the India RegTech market growth.

Rising Need to Reduce Cost Burden of Compliance To Bolster RegTech Market During Forecast Period

Financial institutions operate in highly competitive markets, which hampers their profitability due to the continuously increasing costs associated with regulatory compliance. These institutions allocate significant resources to remediation programs aimed at meeting stringent regulatory requirements while struggling to meet them. Noncompliance often results in the imposition of hefty fines. For instance, in October 2019, BNP Paribas was fined US$ 15 million by FINRA for its failure to establish an Enhanced Due Diligence (EDD) program capable of identifying suspicious penny stock and wire transfer activities.

Similarly, in 2018, Morgan Stanley was fined US$ 10 million by FINRA for its Anti-Money Laundering (AML) program's failure to meet the mandates of the Bank Secrecy Act. While many banks have already implemented technologies focused on regulatory compliance, the emergence of RegTech presents an opportunity for these institutions to enhance their competitiveness by adopting sustainable and efficient solutions. A variety of new RegTech solutions are entering the market to address the rising costs associated with compliance. Thus, the rising need to reduce the cost burden of compliance is anticipated to boost the RegTech market during the forecast period.

RegTech Market: Segmental Overview

In terms of deployment type, the market is divided into on-premises and cloud. The on-premises segment dominated the RegTech market share in 2022. The on-premises deployment model provides organizations with full control over their resources. This level of control allows organizations to customize and tailor the RegTech solutions to their specific needs, ensuring optimal performance and compliance. Moreover, on-premises solutions offer organizations the flexibility to customize and integrate the RegTech solutions with their existing systems and workflows, which is further anticipated to fuel the on-premises segment growth in the market.

RegTech Market Analysis: Competitive Landscape and Key Developments

The RegTech market report emphasizes the key factors driving the market and prominent players' developments. IBM Corporation; Deloitte; Thomson Reuters Corporation; PWC; Broadridge Financial Solutions, Inc.; MetricStream Inc.; Jumio; ACTICO GmbH; Acuity Group Limited; and Ascent Technologies are among the prominent players profiled in the RegTech market report. The market players focus on new product launches, expansion and diversification, and acquisition strategies, which allow them to access prevailing business opportunities. As per company press releases, below are a few recent key developments:

• In March 2023, Ascent Technologies, Inc. launched a new product called the Compliance Confidence Scorecard. This offering provides businesses with comprehensive regulatory change analysis and monitoring. It enables organizations to effectively map their solutions and services to ensure compliance with regulatory requirements. The Compliance Confidence Scorecard helps businesses stay on top of regulatory changes and streamline their compliance processes.
  
  
• In April 2023, Modyo, a provider of composable frontend platform technology, formed a strategic partnership with Jumio, a leading online identity verification and authentication platform. This collaboration is a significant development for Modyo's ecosystem of solutions. By joining forces with Jumio, Modyo aims to enhance its technology and offer accelerated end-to-end customer onboarding solutions for large organizations. The partnership with Jumio will enable Modyo to integrate and connect with Jumio's powerful identity verification and authentication capabilities. This integration will further strengthen Modyo's ability to provide streamlined and secure customer onboarding solutions, ensuring compliance with regulatory requirements and improving the overall user experience.

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