Voice of the Industry

Asia's regtech leaders

Thursday 18 August 2022 09:30 CET | Editor: Raluca Ochiana | Voice of the industry

Asia-Pacific is expected to become the new engine of regtech growth and innovation over the next years. 


Asia-Pacific is expected to become the new engine of regtech growth and innovation over the next years. The rapid development of emerging Asian markets and their financial systems and increased investment in new technologies and digital transformation are driving this trend.

As the global regtech market is projected to grow at a rate of over 20% per year to USD 16 billion by 2025, up from USD 6.3 billion in 2020, the APAC region is expected to have the highest growth rate.

When it comes to regtech innovation in Asia, Singapore and Hong Kong are leaders, while developing economies, such as Laos, Myanmar, and Cambodia, or rapidly growing economies, like Vietnam, Indonesia, Thailand, and the Philippines have been slower to adopt regtech. The lack of general interest in these markets for regtech solutions stems from regulatory inertia and a marked difference in behaviours and attitudes. In these regions, AML controls are more governed by a desire to meet the basic minimum and are using technologies that have been around for a long time.

All in all, challenges and barriers faced by regtechs in APAC vary by market and can be divided into those of developed economies and the more emerging economies.

Regtech drivers in Singapore

Singapore is considered a fintech hub with a maturing regtech market due to the grants and guidance provided by the Monetary Authority of Singapore (MAS), strong government support, availability of talent and capital, plus the impact COVID-19 had on the digitalisation of financial processes. Yet, there are other initiatives that foster regtech growth in the area:

  • The MAS announced an SGD 42 mln grant program, the Regulatory Technology grant scheme and the Digital Acceleration Grant scheme, designed to ‘accelerate technology adoption in the financial sector’. The grants aim to promote risk management and compliance functions, plus encourage the adoption of digital solutions to enhance productivity, cybersecurity, and operational efficiency. 
  • As remote KYC creates a higher risk of fraudulent activity such as identity theft and the forging of documents, in March 2021, MAS and the Association of Banks in Singapore (ABS) issued a report exploring the AML/CFT risks created by increased levels of remote working.
  • In December 2021, the UK and Singapore signed a Memorandum of Understanding to strengthen the two countries’ collaboration on addressing legal and regulatory issues around digital identities
  • Also in 2021, the MAS announced a centralised digital platform, the Collaborative Sharing of ML/TF Information and Cases (COSMIC), that aims to facilitate the sharing of customer and transaction information among financial institutions. The MAS is developing the platform with input from six commercial banks — DBS Group, Oversea-Chinese Banking Corporation, United Overseas Bank, Standard Chartered Bank, Citibank, and HSBC, and it is expected to launch in 2023. COSMIC will enable financial institutions in the country to digitally warn each other about unusual activity in customers’ accounts.
  • Other key regulatory announcements from MAS that are likely to help shape the compliance landscape in 2022 include strengthening AML/CFT controls of digital payment token service providers and setting out MAS’ expectations on AML/CFT controls for the digital payment token sector.

Regtech solutions players in Singapore

There are over 21 regtechs in Singapore, with prominent regtechs including Centenal, Cynopsis, Dathena, Silent Eight, Tookitaki, and Merkle Science.

Silent Eight creates custom compliance models for financial institutions globally. It aims to empower its clients in their fight to eliminate financial crime. What’s more, the company has global hubs in New York, London, and Warsaw. In 2020, the company completed its early-stage funding round and the next year, it partnered with HSBC to boost the bank’s compliance operations. At the beginning of spring, Silent Eight closed a USD 40 million Series B funding round to further develop its technology. Concurrently, the firm expects to hire over 150 data scientists, developers, and engineers in 2022.

So who wants ‘to build the infrastructure necessary to ensure the safe and healthy growth of the crypto industry — starting with understanding the risks associated with cryptocurrency transactions’? predictive blockchain monitoring and investigative platform Merkle Science raised USD 5.75 mln in September 2021 and launched into the US market, due to the surging institutional interest for cryptocurrencies and compliance in this region. With clients across APAC, Europe, and North America, Merkle Science has grown its revenue by over 900%, and its headcount has tripled in size since its launch in 2018. 

Dathena is an innovator in artificial intelligence-powered data protection, which in 2020, raised USD 12 million to help companies protect against breaches while remaining in compliance with GDPR, the California Consumer Privacy Act (CCPA), and other such regulations. Later, it was acquired by US-based cybersecurity and compliance company Proofpoint to strengthen its enterprise information protection offering. 

Regtech drivers in Australia

Australia has also started to intensify its activity around regtech. Currently, there are 80 regtechs, with names such as Identitii, OCR Labs, Auraya, Simple KYC, First AML, Verifier. But things haven’t been like this all the time. Australia’s fragmentary domestic investment has prevented the growth of regtech in the market. Most of the industry is being self-funded by Angels and high net worth individuals, with venture capital and corporate venture capital lagging. This resulted in 70% of regtech firms being bootstrapped by their funders, directors, or employees. According to Enterprise Ireland, this investment gap is preventing mainstream adoption of regtech despite an increase in global demand. 

Still, the Australian government is supportive. In September 2019, the Senate established a Select Committee on Financial Technology and Regulatory Technology to investigate the size and scope of the opportunity for Australian consumers and businesses arising from fintech and regtech and any related matters.

With opportunities arising from technology, also come risks, especially in remote identification, a need spurred by COVID-19. Australia’s regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC) released a report on how to comply with KYC regulations during the pandemic. The report included recommendations on using alternative proof of identity processes and disclosure certificates for corporate customers. The documentation also addresses dealing with customers in isolation, customers with no access to technology, and situations in which front-line staff are unable to verify documents as they would in person.

Another aspect that will stand the development of the regtech sector in good stead is the emergence of Open Banking and the Consumer Data Right (CDR). These significant microeconomic reforms allow customers to instruct their bank to send their data to a competitor, who could use it to price or create better services. For instance, local regtech company Adatree was born out of the Open Banking system, taking companies through the technical and security compliance involved in becoming an accredited customer data recipient.

Regtech solutions players in Australia

London headquartered, identity verification provider OCR Labs received USD 30 mln in Series B funding from New York-based Equable Capital to expand its team in North America and EMEA. OCR Labs solves challenges such as identity fraud and regulatory compliance, using its proprietary technology. The company was originally founded in 2016 by Matthew Adams and Daniel Aiello and launched its first product in 2018. Since announcing its Series A in 2021, OCR Labs has continued to scale into the UK and European markets. As part of its Series B, it is bolstering its international growth with a new office in North America. Thus, OCR Labs has raised USD 46 mln through its combined Series A and B while investors include OYAK and Halkin Ventures.

Founded in 2017, anti-money laundering startup First AML entered Australia in May 2021, after experiencing demand from the nation’s VC community for solutions that help them manage compliance requirements. Then six months later, the company got USD 21 mln in Series B to expand into international markets, starting with the UK, while also looking to go to Singapore and the US. The company also plans to double its employee count from 90 to 180.

First AML’s regulatory technology platform streamlines AML compliance for financial service providers, law companies, real estate agencies, and accountants. The company’s end-to-end Customer Due Diligence platform automates the identity verification of customers and includes biometric identification for remote verification and new visual tools to help users understand the ownership of company structures. First AML is also building a database, which currently has more than 350,000 verified entities.

According to TechCrunch, one of the main ways First AML is different from other digital ID authentication startups (like Jumio, Onfido, ForgeRock, etc.) is that instead of individual end-users, it focuses on complex entities and transactions. 

Identitii’s Software-as-a-Service Regulatory Reporting platform helps financial institutions automate AML/CTF reporting to reduce the risk of non-compliance with financial crime regulations. Initially available for AUSTRAC reporting in Australia, the Identitii platform adapts for regulatory requirements in other countries, with New Zealand and Canada among the jurisdictions to be added soon. In August 2021, the company’s share price has been a major performer on the Australian broad indices, with a market capitalisation of approximately USD 33.5 million at that time. Identitii shares have been on the move since the company made two major announcements. First was an announcement that the company had been granted a patent on its intellectual property (IP) in the US. Next was the company’s earnings release, where the company recognised a 45% year-on-year increase in revenue to USD 1.4 million. As a result, Identitii increased its turnover to USD 2.7 million. Finally, the company reported that Citibank signed a letter of intent with the company to potentially licence its flagship product- the Overlay+ platform for AUSTRAC reporting standards. At the end of 2021, Identitii joined the NICE Actimize X-Sight Marketplace.

Therefore, not only is Identitii doing well. But Complii reported a significant jump in revenue for the December 2021 quarter with its acquisition of PrimaryMarkets in November 2021, expected to provide even further opportunity for growth. The company specialises in Software-as-a-Service (SaaS) based technology that digitises compliance, capital raising, and operational functions, assisting Australian financial services licence (AFSL) holders to meet their regulatory obligations. Hence, it achieved a cash flow positive quarter (excluding research and development receipts) with group gross revenue increasing by 370% from the previous quarter to USD 2.58 million. Moreover, in 2022, Complii plans to release a new staff trading module for AFSL clients this quarter and will focus its resources on onboarding new clients and projects, in connection to its expansions plans across the financial services sector in Australasia, as well as in Singapore and Hong Kong.

Finally, another Australian company on our radar is the end-to-end workflow solution for KYC, Simple KYC. The company announced a partnership with Kyckr to launch ‘UBO Verify’, which automatically analyses cross-border ownership structures and allows easy Ultimate Beneficial Ownership (UBO) calculation. We expect this topic, UBO, to gain momentum in 2022, following FATF’s consultation in 2021, regarding ultimate beneficial ownership. The proposed UBO revisions, outlined in 2021, would require banks and other financial institutions to retain beneficial ownership information in a registry (or alternative mechanism) and ensure that beneficial ownership information is ‘adequate, accurate, and up to date’ and ‘sufficient to identify the natural person(s) who are the beneficial owner(s)’.

Regtech solutions players in Hong Kong

CRIF, a global company specialising in credit bureau and credit solutions, announced a global commercial partnership with regtech company Know Your Customer underpinned by a strategic financial investment into the firm. The partnership will enable Know Your Customer to leverage CRIF’s customer network across 40 countries and 10,500 financial institutions to accelerate growth in new and existing global markets. 

HK-based Blockpass offers digital identity verification for businesses that participate in regulated industries, including crypto wallets and exchanges, virtual banks, traditional financial institutions, and gaming. Though the company didn’t announce any big investment, Blockpass has plenty of potential to grow as it serves the nascent industry of NFTs and the metaverse. In November 2021 Blockpass announced providing essential KYC services for the Polygon protocol, while in December the company started providing KYC & AML screening for Bonuz Ecosystem, a new ecosystem for creators, celebrities, brands, and other people of fame to engage with fans on Solana.

In 2021, AML RightSource, a firm focused on fighting financial crime, acquired Honk Kong-based Blue Umbrella, a regtech SaaS solutions provider that offers third-party compliance technology. Digital identity, eKYC & data portability provider, Chekk had been selected for its solutions by Ripple and was also named ‘Compliance Firm of the Year – KYC’ in the RAW Compliance Awards in 2021. 


Currently, many offerings in the Asian regtech market are at a relatively low level of maturity, with a lot of the focus around automating compliance processes. But the landscape is beginning to change significantly and grow, especially with the Asia-Pacific regulators’ encouraging attitude towards building new solutions on innovative technology platforms that enable deeper and more sophisticated collaborations between regulators and financial institutions.

Furthermore, if we think about the flourishing crypto market, the nascence of Web 3.0, the emergence of CBDCs trends that are so embedded into the Asian financial market, regtech is a space to watch out for.


This editorial was first published in our Financial Crime and Fraud Report 2022, which showcases the innovation and development of the best practices and instruments used by financial institutions in their fraud prevention activities, to improve the digital onboarding process of their customers while fighting against financial crime. 


About Mirela Ciobanu

Mirela Ciobanu is a Senior Editor at The Paypers and has been actively involved in drafting industry reports, carrying out interviews, and writing about innovation in payments and fintech. She is passionate about finding the latest news on AI, crypto, blockchain, DeFi and she is an active advocate of the need to keep our online data/presence protected. Mirela has a bachelor’s degree in English language and holds a master’s degree in Marketing. She can be reached at mirelac@thepaypers.com or via LinkedIn.



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Keywords: digital identity, fraud prevention, KYC, AML, identity verification, biometric authentication, compliance
Categories: Fraud & Financial Crime
Countries: World
This article is part of category

Fraud & Financial Crime