According to global fintech research, Regtech’s global investment reached $ 9.2 billion, with some transactions exceeding $100 million. High demand right now. What will the future be like? Recently, some of the biggest exits in the industry belong to US-based companies. Transmit Security raised $ 543 million in Series A funding this summer, which will be used to expand and enter new markets. This is the largest round for a cybersecurity company.
In addition, to develop its R&D, marketing, and sales, another US-based cloud security company raised $ 189 million in its recent F Round. The investors were Third Point Ventures and Premji Invest. Another notable company on the market, Onfido, is currently preparing for an IPO. The Telegraph reports that Onfido has begun applying US accounting standards in preparation for the move. The company is currently valued at $ 479 million.
However, a Canadian startup lifted up to $394 million this summer in Series D funding. The round was headed by the venture company TCV. Investors see a growing demand for online identity verification solutions from online marketplaces and financial services, so the funding is aimed at increasing the company's market share.
Moving towards European transactions, there are equivalent checks in the later stages and smaller checks in the early stages such as SaaS Tools from AI Shift Technology, which increased $ 220 million in Series D this spring.
The Regtech market is expected to grow by $ 9.70 billion over 2021-2025, reaching over 20% CAGR over the forecast period. Therefore, Investors are constantly looking for ways to address compliance issues, helping to bring new customers quickly, safely, and efficiently. New AML rules make it harder to comply.
In addition, the global pandemic has brought many services online, which has greatly increased the need for online identity verification and automated solutions. Another reason for this is that the rate of identity fraud is on the rise from year to year. Identity fraud cases increased by about 45% in the past year (FTC data), causing financial damage to many people.
FTC has generated a report which shows losses have grown from $ 1.8 billion in 2019 to $ 3.3 billion in 2020, so the demand from identity fraud companies (including various Regtech solutions) has increased. In addition, automated KYC solutions can make it easier to acquire new customers, which can increase conversions, reduce churn rates, and reduce the number of canceled transactions.
Automated solutions based on artificial intelligence and machine learning can eliminate all human errors and accelerate the process. Bad data management lengthens onboarding and has a negative impact on the customer experience. Because of this, banks as well as other financial service providers are constantly looking to invest in revolutionary Regtech technologies.
Cybersecurity businesses will remain withinside the highlight for the investors. Top investments in 2021 had been made in this sector including Transmit Security deal. Cybercrime has continually been a threat for a lot of industries.
Another appealing kind of enterprise within the Regtech enterprise is KYC and identity verification solutions, and it would live this way. The largest funding rounds outside America had been raised through those forms of companies. Artificial intelligence and machine learning-primarily based totally technology make the Regtech marketplace mature and evolve. Investors are seeking to improve the technology in the current agencies or make investments within the progressive era primarily based totally on Artificial intelligence.
There isn't any doubt that the arena will simply develop and emerge as a greater appeal for VCs and angel investments. According to Allied Market Research, the Regtech marketplace is projected to reach $28.33 billion via way of means of 2027, developing at a CAGR of 22.3% from 2020 to 2027. The ability of the enterprise is without a doubt huge, giving the same possibilities to each trader and gamer alike.
In the future, we assume to look at different regions of monetary offerings beginning to play a larger function, as Regtech is swiftly being implemented in extra sectors than the same old retail and compliance space. We additionally see Regtech gambling’s extra distinguished function in the critical communique on sustainable finance and Environmental Social and Corporate Governance (ESG) reporting, with Regtech’s usage of their recent regulatory reporting understanding to enhance the reputation quo.