What is RegTech? Is FinTech a broader term?

RegTech, a blend of "regulation" and "technology", refers to technologies that address regulatory and compliance needs — particularly in the financial sector (though not exclusively within traditional FinTech).

Broadly defined, RegTech encompasses technologies and procedures (yes, procedures matter!) aimed at optimizing and automating processes required by legislators or regulators in a given legal system — or in line with international legal standards. In short, RegTech helps organizations implement financial controls, facilitate information exchange, or even verify identities in a compliant and scalable way.

Is there a space for RegTech beyond the financial sector?

Absolutely. While RegTech is deeply rooted in the financial ecosystem, its solutions are also essential in:

• B2B partnerships

• Highly regulated industries

• Entities subject to external audits (e.g., partners of major tech companies, rating agencies, etc.)

RegTech solutions are applicable at every stage of the client lifecycle, especially when customer verification is required — regardless of company size or tech maturity:

• Prospecting: registry data, sanction lists

• Negotiation & onboarding: registry data, sanction lists, PEP (Politically Exposed Persons) checks

• Ongoing collaboration: financial data, monitoring changes

In larger organizations, these processes are typically handled via APIs; in smaller ones, often via SaaS platforms.

RegTech & FinTech — two ecosystems, one mission

RegTech is a core part of the FinTech ecosystem, supporting a wide array of processes such as:

• Sanction list screening

• Customer onboarding (KYC, registry data)

• Financial scoring (P&L analysis)

• Authorization and credentialing (e.g., for debit card issuers)

Many of our clients are FinTech companies, and personally, I use both terms — RegTech and FinTech — interchangeably at times. Why?

• Strong interdependence between the ecosystems

• The vast majority of FinTechs rely on RegTech solutions

• Shared regulations: AI Act, DORA, etc.

• Common challenges and threats

• Talent often migrates within both sectors

The role of AI in RegTech

AI and machine learning are playing an increasingly critical role in RegTech:

• Sanction list screening — due to the complexity of lists and lack of unique identifiers like VAT IDs. Often, the only qualifiers are company name, personal names, and date of birth — and even those aren't always available.

• Fraud detection models — e.g., identifying capital and ownership links between entities

• Models minimizing late payments or insolvency risks — using behavioral and financial data

Why is RegTech gaining momentum?

Because compliance is becoming more expensive and complex, and regulations are changing rapidly. Companies need flexible, adaptive tools that can keep pace — and manual compliance efforts simply don’t scale.

With AI/ML and well-structured regulatory data, we're moving from merely reading regulations to truly understanding them — the so-called "RegNet moment."

API-first & SaaS-native

Modern RegTech solutions are designed to integrate seamlessly with today’s FinTech and enterprise architecture. API and SaaS models enable fast deployment without the need to build in-house infrastructure — making them ideal for both startups and large institutions.

In Summary

RegTech is a rapidly growing segment that leverages advanced technologies to help companies meet increasing compliance demands and prevent abuse or fraud. Through scalable SaaS and API-based solutions, RegTech supports KYC, AML, regulatory monitoring, and broader compliance needs — offering the flexibility and speed that modern businesses require.