Compliance pressures fuel growth in the RegTech market

By Vriti Gothi

The global regulatory technology (RegTech) market is expected to expand significantly over the next decade as financial institutions increase investment in automated compliance and risk management systems.

According to a report by Allied Market Research, the global RegTech market was valued at $11.7bn in 2023 and is projected to reach $83.8bn by 2033, growing at a compound annual growth rate (CAGR) of 21.6% between 2024 and 2033.

The growth is being driven by rising regulatory complexity, increasing focus on transparency in financial operations, and evolving government policies across global markets. Financial institutions are turning to RegTech platforms to automate compliance monitoring, reduce operational costs, and improve the efficiency of reporting and risk management processes.

The report highlights that solution-based platforms accounted for the largest share of the market in 2023, representing nearly three-quarters of total revenue. These platforms typically combine automation technologies such as artificial intelligence, machine learning and robotic process automation to enable real-time compliance monitoring, fraud detection and regulatory reporting. Meanwhile, the services segment is expected to grow steadily over the forecast period as institutions seek implementation and support capabilities to manage increasingly complex compliance frameworks.

Deployment trends indicate that on-premise solutions currently dominate the market, accounting for close to three-fifths of total revenue in 2023. Organisations continue to prioritise on-premise infrastructure to maintain greater control over data security and regulatory oversight. However, cloud-based deployments are also gaining traction, supported by the need to reduce infrastructure costs and enable real-time access to operational and financial data.

Banks remain the primary adopters of RegTech solutions, driven by increasing regulatory scrutiny and the need to modernise legacy systems. Financial institutions are investing in technologies supporting know-your-customer (KYC) processes, real-time anti-money laundering monitoring, AI-driven fraud prevention and automated compliance reporting.

Insurance companies are also accelerating adoption as they look to manage regulatory obligations more efficiently and reduce compliance costs. The report notes that insurers are increasingly deploying technologies that support risk analytics, regulatory reporting automation and compliance monitoring.

From a regional perspective, North America currently holds the largest share of the global RegTech market, reflecting strong adoption among banks and financial institutions and increasing collaboration between technology providers and regulatory bodies. In contrast, the Asia-Pacific region is expected to record the fastest growth, as financial institutions across emerging economies invest in digital infrastructure and compliance technologies to address expanding regulatory requirements.

Key vendors operating in the sector include International Business Machines, Thomson Reuters, Broadridge Financial Solutions, ComplyAdvantage, Wolters Kluwer, MetricStream and NICE Ltd..

The report indicates that technology integration remains a core competitive strategy among RegTech providers. Companies are increasingly embedding AI, predictive analytics and cloud-based infrastructure into their platforms to enhance automated compliance monitoring, real-time risk detection and regulatory reporting capabilities.

Partnerships with FinTech firms, financial institutions and cloud providers are also becoming more common as vendors seek to expand global reach and deliver integrated regulatory solutions in an increasingly complex financial services environment.