RegTech: Changing the Landscape of Financial Regulation

Friday, December 21, 2018 | By Caitlin Kaldany

According to Deloitte, RegTech, or regulatory technology, is the “new Fintech” --- an industry undergoing transformation by innovative software. RegTech provides next-generation solutions to common regulatory problems through agile platforms that quickly and easily integrate into existing software. Adapting machine learning, blockchain technology and AI to the reporting and compliance domain, RegTech firms around the world are capturing the attention of venture capital firms and high-profile clientele.

The increased cost of compliance and low-entry barriers for SaaS-based offerings have driven the RegTech market to expand at a rapid pace. In a report published on December 6, MarketsandMarkets estimates the global RegTech market size to be $4.3 billion. With a CAGR of 23.5 percent, the RegTech market is expected to virtually triple in the next 5 years, reaching $12.3 billion by 2023. Large enterprises and North American firms are estimated to capture the largest market shares within client and geographic segmentation approaches, respectively. The largest clients of RegTech products are asset managers, banks, brokerage houses and other financial entities with extensive regulatory requirements.

Deloitte has identified over 263 start-ups and firms currently engaged in five discrete service offerings within the global RegTech market:

With a wide array of offerings and opportunities for transformation, the RegTech market is echoing the expansion pattern of the FinTech market. According to Oliver Wyman, $5 billion was invested in RegTech startups in 585 deals from 2013-2017. In its infancy a few years ago, RegTech is now teeming with hundreds of hyper-focused, niche startups pioneering technologies that will eventually become target acquisitions for larger financial institutions. SS&C GlobeOp Regulatory & Analytics Solutions is constantly building new technologies to deliver first-to-market solutions within the global RegTech market. Ultimately, firms that innovate first and capitalize on compliance efficiency as a competitive advantage” will see the benefits of investing in RegTech come to fruition.

Finally, RegTech has the capability to transform financial regulation itself. The same Oliver Wyman report says that in the future, “financial regulations could be written into supervisory systems that banks simply plug into…[therefore, compliance] and adaptation to regulatory change would be automatic.” While this may seem a long way off, RegTech forerunners are hard at work developing technologies that could power the next generation of financial regulation.

Within Deloitte’s five service offering framework of RegTech, SS&C GlobeOp Regulatory & Analytics Solutions sits primarily under the Regulatory Reporting umbrella, while a few analytic product offerings fall under Risk Management. SS&C GlobeOp helps fund managers, global asset managers and financial services firms meet worldwide regulatory requirements by providing data aggregation, expert analysis, reporting and transparency. Our product suite covers requirements under both the SEC and CFTC as well as other regulatory boards, including AIFMD – Annex IV, FormPF, Basel III, CPO/PQR, EMIR, Form 13F, OPERA, Solvency and TIC Reporting. For more information, please download our brochure or contact Richard Clark, Managing Director, Regulatory Reporting or Justin Meagher, Managing Director, Regulatory Solutions at