Bradley Elliott, CEO of RelyComply
Financial crime and regulations are evolving rapidly, but so are the Regulatory Technology (RegTech) providers helping the financial sector stay compliant and prevent nefarious activities.
With the global market expected to reach $25.19 billion by 2028, here are some key RegTech trends to watch in 2025.
1. AI adoption keeps accelerating.
Expect AI to become even more central in RegTech. For anti-money laundering and countering terrorist financing (AML/CFT), AI-backed automated monitoring can detect behaviour patterns in real-time to flag anomalies indicating financial crime. It can compile reports quickly and lower pitfalls resulting from manual errors, like high false positive rates.
Gartner reveals that 60% of compliance officers plan to invest in AI-powered RegTech solutions by 2025. Legal frameworks like the AI Act in the EU and good practices in transparency, ethics, and bias minimisation are helping to boost confidence in the tech.
2. Better understanding of digital assets
Financial institutions (FIs) have minimised exposure to blockchain cryptocurrencies, virtual currencies, the metaverse and digital assets because of the need for regulatory clarity. Given the risks of money laundering and other fincrime, we expect to see more regulations introduced to recognise and classify digitalised assets and currencies.
This could lead to higher adoption of crypto and other digital assets. By 2027, the World Economic Forum predicts that tokens stored on the blockchain could make up 10% of global GDP. Flexible RegTech platforms will help FIs manage the risks associated with digital assets and currencies in line with existing AML processes.
3. Putting protection first
The EU-wide Markets in Financial Instruments Directive (MiFID II) and the General Data Protection Regulation (GDPR) encourage standardised, transparent ways to protect sensitive customer data. RegTech platforms and AML/CFT protocols must be underpinned by robust data privacy, cybersecurity infrastructure, and strong risk management programmes. Effective due diligence on customers and their networks will require innovation in verification techniques during onboarding.
4. Adapting for quick-fire risk in the cloud
FIs must adopt a risk-based approach to AML compliance to monitor high-risk individuals or payments continuously. Migration to the cloud supports adopting a real-time, risk-based framework that manages compliance and reporting more efficiently, drives down costs and mitigates regulators’ concerns. With the cloud, regulatory data can be stored securely and analysed in one place, scale to the changing demands of regulations, and integrate easily with legacy systems.
5. Maintaining sustainability
Environmental, social, and governance (ESG) principles matter more than ever for FIs. Sustainable finance comes with regulatory trapdoors, where falling foul of ESG risks can harm an FI’s public reputation. Organisations can use cutting-edge RegTech solutions to identify, analyse, and report data to assess their ESG commitments.
6. Cross-border and private-public cooperation efforts to redouble
In line with the Financial Action Task Force’s (FATF) recommendations, we can expect closer cooperation across the ecosystem to manage a connected world’s compliance and fincrime risks. Such links enable institutions to standardise their processes to adhere to global regulations and regulators and governments to combat fincrime.
The trend includes deepening partnerships between financial houses and RegTech providers to improve control over compliance, data management, AML, cybersecurity, and more. In addition, we can expect to see greater cooperation between governmental bodies, regulators, and businesses to strengthen the world’s AML/CTF protections.
ENDS
