This spend will grow from USD 68 billion in 2022, representing growth of over 200% over the next four years. The report identified the integration of regtech services with Banking-as-a-Service (BaaS) models as key to realising this future market growth.
The new research, Regtech: Emerging Trends, Regulatory Impact & Market Forecasts 2022-2026, predicts that BaaS models, which include outsourcing regtech services such as digital onboarding, will be key in accelerating AI-based automation for online document verification and Know Your Customer (KYC) processes.
According to the research, 26% of digital onboarding processes in the banking market will use AI systems by 2026, compared to just 8% in 2022. Beyond digital onboarding, the report suggests that regtech will leverage BaaS models to expand the use of AI in banking for more comprehensive tasks, including fraud detection and mitigation.
Additionally, regtech vendors must provide verification services in emerging areas where compliance is being disrupted, such as cryptocurrency exchanges, digital healthcare, and online gambling. Impending changes to regulations in these markets will provide significant opportunities for regtech vendors to broaden their focus beyond financial markets to capitalise on new addressable user bases.
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