Spending on RegTech is expected to exceed $130bn by 2025, growing by 290% from the $33bn spent in 2020, a new study from Juniper Research claims.
This growth will be driven by a greater use of AI to automate highly manual tasks and the transition to digital onboarding, which emerged as critical capabilities in the wake of the pandemic.
Juniper recommends that RegTech vendors make AI a core part of their solutions, but also leverage human intelligence to ensure decisions remain fully explainable. By leveraging AI capabilities to automate manual tasks will enable businesses to improve spending levels of regulatory compliance.
The research, Regtech: Market Opportunities, Challenges & Forecasts 2021-2025, also found that nearly 330 million new bank accounts will be opened via digital onboarding in 2025, from 184m in 2020.
Ultimately, consumers will continue to use digital onboarding in greater numbers and vendors need to support this.
Another finding of the report was that almost 18% of banking digital onboarding in 2025 globally will utilise AI. The same stat for 2020 was just 4%.
Research author Nick Maynard said, “Digital onboarding has been accelerated by lockdown measures, but ultimately, it is an acceleration of existing trends towards greater digital engagement. Businesses should rebuild their KYC and onboarding processes from the ground up to take advantage of these new capabilities, or they will lose ground to digitally native competitors.”
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