What does the UK regtech ecosystem need? Nikhil Asthana explains the results of our recent survey – looking at the critical themes, immediate priorities, and long-term focus.

The field of regtech is currently worth £6.6 billion a year in the UK and increased customer demand, government regulation and interest from investors is catalysing rapid growth – bringing a huge impact on the global economy. To get a clearer idea of what's happening in the industry we surveyed regtech vendors, advocates, and financial services regulated firms.

In partnership with City of London, we designed some questions to understand the needs of the UK regtech ecosystem and map the critical themes across the industry. 40 organisations shared their views with us, uncover the key results below.

The results: key takeaways for regtech

  • 39% of respondents put horizon scanning as the most challenging aspect of the regulatory environment
  • 50% of regtech vendors highlight the areas of opportunity are environmental, social and governance (ESG), financial crime and AI (artificial intelligence) regulations
  • 65% of regulated firms anticipate more regulatory obligations in 2023/24, but only 50% will invest more in regtech solutions during this period

Benchmarking a global regtech industry standard

In this complex environment, understanding what good looks like is difficult even for larger firms with well-established and robust processes. The indication is that open and safe communication on how they compare to their peers is a priority across the industry.;

Regtech buyers are indicating the need to navigate complex regulations, such as ESG and Consumer Duty in a way that allows them to understand what's working well for other firms. This type of open-source environment will offer participants the opportunity to reduce regulatory risk and meet  requirements in a more efficient and faster manner in the medium to long-term future.

Top five priorities for regtech ecosystem areas

The top five regtech ecosystem areas all represent a need for collaboration between the three different personas surveyed. The key take away is the need for an industry body to bring each of the parties together in a focused and strategic format.

Q. Of the activities and outcomes listed below, could you indicate the top 5 you think should be prioritised?


Chart depicting the activities and outcomes


Areas of opportunities for regtech

In the current volatile financial climate many believe that the best way forward for the regtech ecosystem is to offer more engagement-sharing best practice for learning and development to allow all involved to contribute, understand, and benefit from regtech solutions.

One of the biggest challenges facing regtech is the ease of use and implementation. Many organisations have legacy systems and complex data structures that don't allow the true benefits of regtech solutions – an ecosystem where all parties can work together to address these challenges and define benchmarks for best practice will make more adoption more efficient.

Q. Looking further ahead, what do you see as the biggest areas of opportunity for developing new regtech solutions?


Regulatory challenges

Horizon scanning, regulatory interpretation, and regulation to controls remain issues for regtech users. These required processes are long-established and will be an ongoing conversation between regtech-user and the regulator. The inclusion of these parts of the taxonomy does open the door for technology-based solutions to play their part in solving this complex interconnected area. 

ESG and data privacy are more recent requirements, and if a regtech association, hopefully established in the near future, can have an early influence on benchmarks and open-source materials, the benefits for the ecosystem will be invaluable.

Q. What aspects of the regulatory environment do you find challenging?


Investing in technology

When buying new regtech one-in-four firms advise integration with exiting systems is key, with 22% considering ease of use key as well. There’s a clear message from the market, supported by regulators, that key c-suite buy-in from their peers would create a path for them to invest in a clear regtech strategy.

Q. What's important when buying new technology?


Regtech solutions for the year ahead

Q. What regtech solutions are you looking to buy over the next 12 months?


The main regtech solutions regulated firms are looking to buy over the next 12 months are:

  • financial crime 
  • horizon scanning 
  • governance risk and compliance
  • regulatory reporting
  • regulatory risk calculations.

Even though other areas of the regulatory taxonomy have been identified as more challenging, the core elements of regtech are still investment priorities.


For more insight and guidance, contact Nikhil Asthana.

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