RegTech Revenues Climb in Step with Startup Activity, Says CCAF Benchmarking Report

September 12, 2019 | FinTech, Regulations

The new report signals a big opportunity for investors in the years ahead

RegTech revenues in 2018 topped $5 billion after a sharp pickup in startup activity.

This figure reflects the finding of the “Global RegTech Benchmarking Report,” published by The Cambridge Centre for Alternative Finance (CCAF).

This industry is the management of regulatory processes within the financial industry through technology. The main functions of the category include regulatory monitoring, reporting, and compliance.

The term also refers to companies that use cloud computing technology to help businesses comply with regulations efficiently and less expensively. These companies generally provide their services via software-as-a-service or SaaS.

According to the CCAF report, the industry saw an influx of startups during the five years ended in 2018. Over 82% of these received their first funding round in this period.

CCAF Research on RegTech

The report relies on a survey of 111 firms in the space and interviews with industry experts and regulators. Other key findings include:

  • The surge in startup activity from 2014 through 2018 coincides with the trends of new regulations during the same period
  • Between 49% and 68% of of firms target FinTechs for business
  • The Regtech industry is already highly international
  • 66% of the sector delivers its services through the cloud
  • About 56% of vendors employ machine learning
  • Approximately 43% use predictive data analytics to describe patterns or predict behaviors
  • The RegTech industry has five segments: Profiling and Due Diligence, Dynamic Compliance, Reporting and Dashboards, Risk Analytics, and Market Monitoring

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