Regtech Will Account For 40 Percent Of Global Compliance Spend By 2023

Regtech Will Account For 40 Percent Of Global Compliance Spend By 2023

Foto: Depositphotos

A new study from Juniper Research has found that spending on Regtech platforms will exceed $115 billion by 2023, up from an estimated $18 billion in 2018. The study found that increased regulatory pressures, as demonstrated by the recent GDPR implementation, are driving businesses towards Regtech to meet greater compliance challenges.

According to the research, any heavily regulated business sector not prioritising Regtech adoption would risk damaging fines from failing to keep pace with regulatory changes. The report also highlighted that the sharp increase in Regtech spending (an average of 45% per annum between 2018 and 2023) was far higher than that for compliance spend as a whole (17%), reflecting the rapid migration of spend to Regtech from traditional methods.

The research found that KYC checks for anti-money laundering are ripe for disruption by AI systems, due to the inefficiency of traditional, paper-based systems. Juniper forecasts that across banking and property sales, annual gross cost savings from AI introduction for KYC will exceed $700 million by 2023, a nine-fold increase over 2018.

Research author Nick Maynard explained: “AI-powered ID solutions are uniquely suited to reducing the resources needed to verify identity. By integrating the correct KYC tools into cloud-based systems, financial institutions can dramatically reduce their compliance burden.”

Juniper analysed various technologies in the Regtech sector based on metrics including anticipated timescale of impact, cost barriers and willingness to adopt new approaches and concluded that cloud computing is currently the most disruptive force in compliance. The transition to cloud-based compliance is a crucial precursor to other Regtech approaches, such as AI or Big Data. Unless businesses effectively plan the correct cloud deployments, they will struggle to utilise the advanced technologies required to meet future compliance challenges.

More from category

CEO Confidence in Growth Dips Dramatically

CEO Confidence in Growth Dips Dramatically

23 Jan 2019 comment

Nearly 30% of business leaders believe that global economic growth will decline in the next 12 months, approximately six times the level of 5% last year, a record jump in pessimism.

Six Technologies That Will Reach Mainstream Adoption in Five to Ten Years

Six Technologies That Will Reach Mainstream Adoption in Five to Ten Years

23 Jan 2019 comment

Of the 29 technologies on Gartner’s new Hype Cycle, eight are entering the Slope of Enlightenment and climbing toward the Plateau of Productivity.

81 Percent of Legal Departments Are Unprepared for Digitalization

81 Percent of Legal Departments Are Unprepared for Digitalization

22 Jan 2019 comment

Eight in 10 corporate legal departments are unprepared to support their organizations’ digital initiatives, according to Gartner.