Every year, we see high volumes of new rules and regulations published. In many cases – be it GDPR or the latest EU Anti-Money Laundering Directive – they bring major challenges to the operations of financial institutions, e-commerce companies and others. To avoid hefty fees for dereliction, compliance departments and armies of lawyers keeping an eye out for any newly issued regulations and ensure compliance. This is an extremely laborious and expensive process: In fact, financial institutions annually spend about $270 billion on compliance.

This pain point has led to the development of regulatory technology (RegTech), which works to standardize regulatory processes, deliver unambiguous interpretations, and automate compliance processes. Over time, RegTech has expanded to many industries and now encompasses categories including:

  • Compliance: reviewing norms and regulations (the biggest area of RegTech)
  • Risk management: detecting potentially insecure situations and ventures
  • Identity management and control: client identity authentication and screening
  • Regulatory reporting: drawing up reports via detailed data management processes
  • Transaction monitoring: flagging of suspicious payments and transfers.

Unsurprisingly, many of the companies helping deal with regulatory challenges are startups, bringing innovative and powerful technological capabilities to the table. What are the startups advancing RegTech? Here are the ten highest ranked companies tracked by VentureRadar founded in 2014 or later:

Ravelin is a fraud prevention platform for online marketplaces and ecommerce merchants who need to approve orders fast. Its technology, based on powerful data science and machine learning, can analyze customer behavior and transactions and provide accurate fraud detection scores. By allowing merchants to confidently accept payments without endangering their business, Ravelin has secured collaborations with companies such as Deliveroo, Booking.com, or Boohoo.

Civic is a company working to reshape the landscape of identity information through blockchain-enabled security. Among other things, Civic operates an app that lets users securely provide authenticated identity to partner websites for account sign up and access. But the company is also developing identity.com, an open-source ecosystem using civic tokens to provide users with low-cost reusable identity verification.

Alloy is a company that uses a single API and dashboard to help banks and fintech companies to streamline their know-your-customer (KYC) processes and uncover money laundering and fraud easily. With efficient automation capabilities, it empowers the institutions to mitigate risks and reduce the burden on the back office and manual review queries.

IdentityMind Global is a California-based RegTech company that operates an on-demand platform that analyzes digital identities online. It provides advanced risk management, fraud prevention, and anti-money laundering services to a vast range of actors, from online lenders to payment processors. IdentityMind Global has recently secured new partnerships and is working to build a stronger presence in regions such as Latin America.

Chainalysis is a company that looks to bring transparency across blockchain structures. To advance confident cryptocurrency exchanges, it works with different institutions across 40 countries, including some government agencies. The company earned recognition as a crypto crime fighter when in 2017, it helped locate 650,000 bitcoin that was stolen from Mt Gox, a major global cryptocurrency exchange.

MindBridge leverages artificial intelligence (AI) to detect errors in financial data. According to the company, its flagship product – Ai Auditor – is the world’s first and only AI-powered auditing platform. Due to its ability to analyze vast amounts of data, it has been sought by global organizations including Big Four and IBM. Recently, it has also entered the public sector by launching a collaboration with various Canadian governmental institutions.

BigID is a global company leveraging machine learning and identity intelligence to help enterprises better protect their customer and employee data at the petabyte scale. Earlier this year, BigID raised $50 million to help enterprises comply with global privacy regulations and meet their data protection needs. The company is now planning to form a comprehensive, multifunctional platform with data discovery, classification, and correlation.

Privitar is a company that helps organizations mine datasets containing sensitive information while preserving privacy or confidentiality. Whether it’s customer data, banking transactions, or patient records, it opens the data for secondary use without endangering privacy or confidentiality. It works with major companies across industries, including HSBC, Citibank, and NHS Digital.

Signzy is a Bangalore-based company founded by IT professionals and serial entrepreneurs. It offers a solution that helps financial institutions solve customer authentication and onboarding issues with different technology-based services. In contrast to the traditionally obsolete practices, it promotes a digital and seamless tool approach that champions convenience and security.

Quantexa empowers organisations to drive better decisions from their data. Using the latest advancements in big data and AI, Quantexa uncovers hidden customer connections and behaviours to solve major challenges in financial crime, customer insight and data analytics.

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Dealing with the complexities of everyday financial processes can be both frustrating and costly. Nevertheless, RegTech can help companies overcome many of the challenges and help optimize institutional workflows even in ways that were previously unthinkable.

If you want to find out more about the companies innovating in RegTech, go ahead and search our database. You can also explore other industries there too, or alternatively you may like to find out about our company scouting services.