The first global benchmark study of the RegTech sector by the Cambridge Centre for Alternative Finance, conducted with the support of EY Japan, is based on a survey of 111 firms as well as regulators and industry experts. We estimate that the global RegTech industry generated $5 billion in revenue in 2018, and had raised $9.7 billion in external funding as of early 2019. The financial services sector dominates demand for RegTech services but most vendors now target non-financial sectors, and this share is set to grow.

The RegTech market can be broken down into five distinct segments: 1. Profiling and due diligence 2. Dynamic compliance 3. Reporting and dashboards 4. Risk analytics 5. Market monitoring.

The sector underwent a period of rapid growth between 2014 and 2018, but is now growing mostly through incumbent expansion rather than market entry. Long sales cycles, complex IT planning within client institutions, difficulties in establishing trust and high levels of competition have left some vendors struggling to gain traction. A handful of larger vendors thus dominate most funding and commercial activity.

Schizas, Emmanuel and McKain, Grigory and Zhang, Bryan Zheng and Garvey, Kieran and Ganbold, Altantsetseg and Hussain, Hatim and Kumar, Pankajesh and Huang, Eva and Wang, Shaoxin and Yerolemou, Nikos, The Global RegTech Industry Benchmark Report (June 30, 2019).

Available from the SSRN site.