Market Trends of Global Regtech Industry
This section covers the major market trends shaping the Regtech Market according to our research experts:
Large Enterprises Account for a Major Portion of the RegTech Market
The large enterprise segment dominates the RegTech industry, which can be linked to the fact that these businesses deal with a lot of data and are consequently forced to use regulatory programs. As a result, the large number of publicly traded companies in this industry underscores the relevance of RegTech solutions and services.
Furthermore, because laws and regulations change by industry and region, keeping track of all operations manually is impossible, emphasizing the significance of RegTech solutions and services. Deloitte, IBM, PwC, and Thomson Reuters, among others, help major organizations reap the benefits of efficiently managing their business processes by compliance rules by enabling them to effectively adopt RegTech solutions tailored to their business needs.
Large global financial institutions are leveraging innovative technologies to help manage their regulatory compliance requirements, resulting in significant efficiencies in compliance, risk, and internal audit functions. Prompted by the COVID-19 pandemic, the financial services industry came up with new and innovative ways to interact with people and continue to conduct site visits, even in the face of stay-at-home orders and global travel restrictions. Many organizations launched a digital product or digital service between January 2020 and March 2021.
Specifically, the top three types of alternative data sources being used are geolocation data, phone usage data, and spending patterns. Other common alternative sources are biometric data, psychometric data, and social media data.
In addition to reducing regulatory risk, alternative data means are helping financial services firms become more efficient, provide a better customer experience, and offer products and services better tailored to their customers.
North America Dominates the RegTech Market
North America is expected to continue its dominance with the highest concentration of players and consumer adoption levels. This is due to North American financial institutions' early adoption of RegTech solutions to minimize compliance costs by using sophisticated technologies like Artificial Intelligence (AI), Machine Learning (ML), blockchain, Big Data, and cloud computing. North America is made up of industrialized economies like the United States and Canada. In terms of technology and application deployments, these countries are far ahead of the pack. Furthermore, the necessity to comply with strict regulations is projected to boost market expansion in North America.
Europe is the second-largest RegTech market in the world, and it is anticipated to remain such over the forecast period. The considerable capital raised by FinTech companies has contributed greatly to the region's growth. In the projection period, Asia Pacific is expected to grow at the fastest rate. Latin America and Middle East & Africa are expected to have a lucrative market for RegTech solutions.
