Published: December 17, 2025
With regulators worldwide placing more complex requirements on the financial services industry, the existing systems and processes used for compliance and reporting are coming under scrutiny. Regtech companies are leveraging technologies that are helping to address this tricky landscape.
Since the financial crisis, regulators worldwide have introduced a plethora of both new and ongoing changes to regulations governing the financial services industry - all of which have added to the costs, burdens and complexities of ensuring compliance.
This has led to an increased focus on improving existing compliance procedures and the systems used – as well as the need to exploit new technologies in a move to reduce manual intervention, improve efficiency, and reduce risks.
Regtech companies are a new generation of small businesses exploiting the use of emerging technologies such as artificial intelligence (AI), robotics, open source and the cloud to provide specific regulatory compliance solutions, and are already actively making an impact.
“There has been a huge extension of the interest in technology to support risk and compliance over the last twelve months,” says John R Liver, partner, Ernst & Young with responsibility for the firm’s EMEIA financial services regulatory compliance capability.
Liver has seen a rapid rise in bank’s interest in regtech’s services and solutions and much of the movement is also being driven by regulators such as the UK’s Financial Conduct Authority (FCA). “Since the financial crisis, the level of change in regulation has been huge with a whole new range of regulations covering capital and liquidity, and this has now reached a very high watermark. However, there is a huge amount of work to be done to improve the capabilities required to achieve this.”
“AI in regtech has the power to deliver the next level of operational efficiency,” adds Simon Eacott, head of payments innovation and business development at NatWest, who points out that the use of AI in regtech offers the capability to sift through structured and unstructured data with little manual intervention to deliver ‘superior’ insights. “Coupled with a bank’s knowledge of their own customers, it will help reduce risk and maintain compliance. This benefits customers, providers and regulators alike.”
Much of the hype surrounding this nascent sector is driven by cost savings. John Byrne, CEO of Corlytics, a regtech vendor specialising in regulatory risk intelligence, explains that smaller regtech company technologies represent a viable alternative to banks building their own systems internally to handle compliance. He explains that banks still prioritize the development of their own systems with the top global 25 banks estimated to spend upwards of US$25bn per annum.
“Many banks are looking for solutions to solve specific problems and this is something they can now buy into through this sector,” Byrne tells EMEA Finance.