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Nordics: Regulatory technology (RegTech)

Market opportunity: Regulatory technology (RegTech)

Key details

Opportunity: Regulatory technology (RegTech)

Country: Nordics

Sector: Technology

Summary

Nordic countries are all progressing in the transformation towards a cashless society and their central banks are exploring possibilities in implementing e-currency. All the Nordic countries are in the European top 10 according to DESI (Digital Economy and Society Index) scores.

Six of the largest banks in the region have formed a joint venture to set up infrastructure for cross-border, multi-currency and instant digital payments between the countries in the region – the first of its kind in the world. The project will replace eight national legacy systems, handling multi-currency payments across a common infrastructure.

This is all happening in a highly regulated and monitored sector. Directives such as PSD2, MiFID, GDPR and KYC regulations have forced the banking sector to allocate investment to their governance, risk and compliance (GRC) procedures as well as technologies (Regtech).

Scale of opportunity

According to Grand View Research, the global GRC market was valued at an estimated 31.27 billion USD in 2019. It is expected to see an estimated compound annual growth rate of 14% between 2018 and 2025.

The European market is estimated to account for 30% of the total market value. The banking, financial services and insurance (BFSI) segment is the largest in terms of GRC investments.

The Nordic banking sector is a consolidated industry with a limited number of banks controlling most of the market share. These incumbent banks have been forced to increase investments in the RegTech space due to fierce competition from challenger banks, but also due to poor publicity following revelations about shortcomings in AML and KYC procedures.

Eligible companies

Scottish RegTech companies with solutions in compliance, risk management, identity management and control, regulatory reporting, and transaction monitoring.

Regtech companies targeting governments and authorities.

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