Today’s Fintech trends post is a little bit different from the previous ones as we write about one of Fintech’s younger siblings. Many speculate that RegTech is becoming the new Fintech, being a sector that needs technological innovation. With the increase of regulation and reporting, RegTech has flourished and become very valuable. Below, we explain what RegTech is, what companies are active in this new industry, and what is its future.
What is RegTech?
Deloitte calls RegTech the “new Fintech” because of its rapid rise in 2015. RegTech is the use of innovative technology to improve the compliance and delivery of regulations. According to Deloitte, it aims to provide “nimble, configurable, easy to integrate, reliable, secure and cost-effective regulatory solutions”.  A report by EY called “Innovating with RegTech: Turning regulatory compliance into a competitive advantage”, outlines the benefits from this new trend. RegTech support innovation by helping regulators protect consumers, gain market integrity and promote competition. Simultaneously, it allows for firms to develop advanced data analytics skills to improve the quality of information. Moreover, RegTech aims to reduce the cost of compliance to regulations.
What companies are active in the RegTech industry?
RegTech has rapidly spread throughout North America and Europe. In the United States, IdentityMind deals with anti-fraud analysis while Hexanika works with big data regulatory reporting. In Canada, startups such as Trulioo which improves electronic identity verification have flourished since 2010. Europe presents worthy competition in RegTech. In the UK, AlgoDynamix and Contego work in the RegTech sphere. In France, Fortia Financial Solutions have been active since 2012 while in Germany Risk Ident was founded in 2013. Ireland, Luxembourg, Switzerland, and the Netherlands have also joined the industry with startups such as ViClarity, The MarketsTrust, KYC Exchange and OSIS respectively.
What is the future of RegTech?
With the quickly changing Fintech landscape that constantly creates new business models, regulatory compliance is becoming more and more important for the future. On one hand, the EY report mentioned above outlines some of the next steps for RegTech. The first is automation and more importantly identifying what exactly can benefit from automation. The second is to recognize the exact market position RegTech will have. Finally, assess the impact of RegTech’s strategy and evaluate future challenges. On the other hand, events such as the RegTech Summit that was held in 2016 are emerging to connect and allow RegTech industry experts to network. It remains to be seen whether the new industry will prosper. The real benefit from RegTech will come when this cost center is turned into revenue that benefits companies.
 RegTech Summit