21 Hottest RegTech Startups That Are Defining the Industry

What is RegTech?

A relatively new term, RegTech refers to a set of companies and solutions that address regulatory challenges across industries, including financial services, through innovative technology. RegTech solutions are agile by nature due to the complexity and momentum of regulatory transitions. Traditionally, the technology was developed to be robust. However, RegTech can’t afford the luxury to deliver a solution for static requirements—it has to be a self-learning machine.

Another hallmark of RegTech is that it is usually cloud-based, which enables solutions to maintain, manage and backup data remotely, having it secured at the same time. Since RegTech utilizes the cloud, it significantly cuts the costs both for providers and clients. Agility leads to great flexibility and speed, which ensures a high level of control over information. Needless to say, modern cloud-based solutions and regulatory requirements set high expectations from tech companies with regard to security. Data encryption powers the safety of deployed solutions. Speaking of deployment, RegTech technology reduces the implementation time, enabling businesses to remove the pain of complex regulatory compliance and focus on business goals.

Sean Smith, a partner in Risk Advisory at Deloitte, commented in the recent report on RegTech, In the short term, RegTech will help firms to automate the more mundane compliance tasks and reduce operational risks associated with meeting compliance and reporting obligations. In the longer term, it will empower compliance functions to make informed risk choices based on data provided insight about the compliance risks it faces and how it mitigates and manages those risks.

Companies brought as examples in the following list may also belong to other FinTech sectors, mostly to the identity verification and authentication. We have discussed the concept of blurred lines in FinTech, which applies perfectly to RegTech as well.

Why is RegTech important?

RegTech allows leveraging existing systems and data to produce regulatory data and reporting in a cost-effective, flexible and timely manner without taking the risk of replacing/updating legacy systems, as explained by Deloitte. RegTech can ensure extraction of clean, accurate, secure and timely data that can be manipulated by businesses in the most beneficial way.

What are the applications?

Data source: Deloitte

Who are the players?

UK RegTech Examples:

Silverfinch connects asset managers and insurers through a fund data utility in a secure and controlled environment.

CheckRecipient automatically predicts and prevents misaddressed emails from being accidentally sent to the wrong recipient.

Passfort is a security keychain device that allows generating, storing and managing unique and secure passwords for all digital services and apps across devices.

Percentile builds technology to service the needs of risk management at a global financial institution.

AlgoDynamix is an innovative risk analytics company that detects disruptive events in global financial markets and anticipates price movements hours or days in advance of the event.

FundApps wraps regulatory information in a cloud-based managed compliance service for asset managers, hedge funds and institutional investors.

Suade designs technology specifically around regulatory concerns. Suade’s solutions enable banks to achieve continuous compliance, manage their costs and easily conduct analyses.

Ireland RegTech Examples:

Corlytics provides compliance risk analysis for financial institutions.

Trustev provides online fraud prevention solutions that scan transactions in real time to determine whether they are real or not.

TradeFlow is a trade data tracking and risk alert-based technology.

Vizor provides software that enables the supervision of companies by a supervisory authority (central bank, financial regulator or tax authority).

AQMetrics offers integrated regulatory risk and compliance management solutions

Funds Reconciliation Software develops cloud-based reconciliation software for the funds industry, replacing prehistoric enterprise software with SaaS.

Sysnet Global Solutions is a leading international provider of information security assurance and compliance validation services.

USA RegTech Examples:

Quarule offers risk controls and compliance certification technology for coordinating governance, automating oversight and retaining and reusing knowledge.

IdentityMind Global is an on-demand platform that provides next-generation risk management and anti-fraud services for the e-commerce ecosystem.

Tradleuses blockchain to bridge internal and external financial networks to achieve user-controlled KYC portability.

Trulioo is a global leader in identity verification. It provides instant electronic identity and address verification for over 4 billion people in 40+ countries.

Trunomi solves KYC and unlocks new revenues and efficiencies with technology to easily create and securely manage the consent to use customers’ personal data.

Switzerland RegTech Example:

KYC Exchange is setting the standard as the first secure communication platform for KYC and customer due diligence (CDD) purposes for the financial industry.

Netherlands RegTech Example:

OSIS offers an alternative way for banks and investors to analyze credit risk by coherently combining a statistical analysis of data with subjective opinions about forward-looking risk distributions. Such analysis captures parameter uncertainty and allows for designing more coherent stress-testing scenarios.