The Opportunity

Today there are roughly 150 innovative, next generation RegTech companies globally. These companies, and the new ones yet to emerge, need broad incubation and acceleration services in order to solve real, complex, and expensive regulatory challenges. These companies are applying a variety of technology solutions including artificial intelligence, machine learning, big data, biometrics, and new application programming interfaces to significant data and compliance challenges. When applied to new regulatory mandates, these innovative technology solutions have the potential to significantly lessen the burden on financial institutions by driving down costs and potentially to decrease capital risk retention.

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Today there are roughly 150 companies globally that focus on RegTech

Middlegame Ventures

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The global spending by financial services companies on regulatory requirements is large and increasing. There are a number of industry estimates that place the global requirement burden around ~$100bn. Market solutions for these requirements have historically been adding additional resources who can address them in a manual way. The increasing frequency and uncertainty around regulatory changes have led financial services companies to grow their spending unsustainably, thus creating an opportunity for emerging firms to change the industry with new, innovative technology solutions to regulatory requirements.

The global requirement burden is estimated around $100bn

Forrester, IBM, WSJ

The Problem

The Financial Crisis required a regulatory response to shore up industry challenges.  The result has been an increase in regulation in most developed markets.  Financial institutions have not yet adapted to this new environment of higher compliance costs creating an opportunity for emerging technology firms to bring value added solutions to both regulators and regulated entities.