The global regtech market is growing exponentially, powered by significant regulatory changes such as MiFID II, PSD2 and GDPR, which all brought with them extensive new obligations for financial services firms. Currently valued at $2.3bn, the regtech market is expected to reach $7.2bn by 2023, coupled with a predicted 500% increase in investment in the sector by 2020, from $10bn in 2017 to more than $53bn at the end of the decade.
Regtech encompasses the vast number of tech solutions to firms’ regulatory obligations, and addresses regulatory reporting, compliance checks, risk management, identity management, transaction monitoring and more, ultimately helping firms to operate for efficiently and competitively.
2018 was a huge year for the industry, with the introduction of the aforementioned MiFID II, PSD2 and GDPR, all of which have had a transformative effect on how firms operate. But the evolution of regtech is far from over, and the potential impact it could have is only beginning to be understood. Below, Matt Smith, CEO of SteelEye, outlines his predictions for regtech in 2019 – and beyond.
Regulators will wake up to the value of Regtech
So far, regulators have done little to support regtech and there has been minimal if any, collaboration among regulators to help boost regtech’s impact across different industries and regulations.
But I predict this is going to change, and regulators will start becoming more proactive in encouraging innovation and collaborating on regtech solutions. Unlike most industries, financial services have no governing body responsible for setting a collaborative regtech agenda, so implementation efforts across different regulations have not so far been aligned.
But in 2017, the International Regtech Association (IRTA) was launched, with the aim of promoting standards, certification, innovation and collaboration in the sector. This was supported by a recent report promoting the adoption of regtech by regulators to streamline their own

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