PUBLISHER: Roots Analysis | PRODUCT CODE: 1752103
PUBLISHER: Roots Analysis | PRODUCT CODE: 1752103
As per Roots Analysis, the global regtech market size is estimated to grow from USD 14.69 billion in the current year to USD 115.5 billion by 2035, at a CAGR of 20.62% during the forecast period, till 2035.
The opportunity for regtech market has been distributed across the following segments:
Type of Component
Type of Deployment
Type of Application
Type of End User
Geographical Regions
RegTech, stands for regulatory technology, refers to the application of technology to assist businesses in adhering to regulations in a more efficient and effective manner. The primary aim of regtech is to enhance and automate processes related to compliance, risk management, and regulatory tasks. The 2008 global financial crisis served as a pivotal event that inspired the emergence of regtech companies. In response, numerous regulators and governments around the globe implemented new laws to avert a similar crisis in the future. This increase in compliance costs for businesses has heightened the demand for more efficient, technology-driven solutions like regtech.
Recognizing the necessity for such technology, regtech companies began supporting financial institutions in meeting regulatory demands by providing advanced tools and services for compliance management. The swift advancement of technology and the rising threat of fraudulent activities have broadened the regtech market's scope. Additionally, the digital transformation within financial services and the escalating regulatory requirements are propelling market growth. Importantly, the financial sector is the primary industry that relies heavily on regtech solutions and services, mainly due to its rapid digital transformation that has intensified the focus on data management, automation, and insights driven by artificial intelligence.
As a result, industry participants are seizing the opportunity presented by the increasing demand for regulatory reporting solutions by utilizing financial technology innovations to provide compliance automation tools and anti-money laundering solutions. Moreover, ongoing technological advancements in artificial intelligence, machine learning, and blockchain have bolstered the capabilities of regtech offerings. Additionally, driven by the rising trend of cloud-based regtech solutions and the necessity for real-time risk management, the regtech market is anticipated to grow significantly during the forecast period.
Based on type of component, the global regtech market is segmented into solution and service. According to our estimates, currently, solution segment captures the majority share of the market. This can be attributed to the significant demand for compliance management solutions.
However, services segment is anticipated to grow at a relatively higher CAGR during the forecast period. This increase is linked to the demand for professional services and expertise in managing tools and regulatory change management solutions in a cost-effective way.
Based on type of deployment, the regtech market is segmented into cloud and on-premises. According to our estimates, currently, cloud-based deployment segment captures the majority of the market. This can be attributed to the rising demand for cloud-based regtech solutions and advantages like scalability, flexibility, and the ability to process data in real-time.
Additionally, a significant characteristic of cloud platforms is their capability to integrate seamlessly with other emerging technologies such as AI. The demand for cloud solutions is further enhanced by advancements in machine learning and big data analytics. However, on-premises segment is anticipated to grow at a relatively higher CAGR during the forecast period.
Based on type of application, the regtech market is segmented into anti-money laundering & fraud management, identity management, regulatory intelligence, regulatory reporting, and risk & compliance management. According to our estimates, currently, risk & compliance management segment captures the majority share of the market. This can be attributed to the widespread applicability across various industries, particularly in the finance, healthcare, insurance, and legal sectors.
Additionally, the rising complexity of regulations and the expenses associated with non-compliance drive the demand for solutions that can streamline compliance practices and manage risks, thus boosting market growth. However, anti-money laundering & fraud management segment is anticipated to grow at a relatively higher CAGR during the forecast period.
Based on type of end user, the regtech market is segmented into BFSI, government, insurance, IT & telecom, non-financial, and others. According to our estimates, currently, BFSI industry captures the majority share of the market. Numerous organizations, including banks, insurance firms, and investment companies, are required to adhere to a broad spectrum of regulations ranging from know your customer (KYC) to anti-money laundering.
Further, the healthcare sector is increasingly implementing regtech and identity access management solutions to comply with patient privacy regulations and detect billing fraud. Consequently, the healthcare industry is expected to experience a higher compound annual growth rate (CAGR) during the forecast period.
Based on geographical regions, the regtech market is segmented into North America, Europe, Asia, Latin America, Middle East and North Africa, and the rest of the world. According to our estimates, currently, North America captures the majority share of the market.
However, the market in Asia is anticipated to grow at a relatively higher CAGR during the forecast period. Countries in Asia, particularly those that are developing, are undergoing a digital transformation where nearly all business sectors are adopting advanced risk assessment technologies to streamline their operations. Regarding compliance technology in finance, governments in the region continue to enforce regulations concerning data breaches and fraud, which is contributing to the growth of the regtech market in this area.
The report on the regtech market features insights on various sections, including: