Enterprise Ireland, Kapronasia Publish APAC Regtech Study

Lengthy procurement processes, cumbersome IT and security approvals, and implementation complexity are hindering APAC regtech adoption. 

Enterprise Ireland and Kapronasia have released a new report identifying opportunities and roadblocks facing regtech players in 10 key APAC markets.

The report provides an analysis on the adoption of regtech in Australia, Hong Kong, Indonesia, Japan, Mainland China, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

“A surge in regulatory requirements across Asia-Pacific in recent years has brought with it an explosion in the use of regtech by financial services firms to maintain compliance,” the report says.

It points to the development of digital economies across APAC, the Covid-19 pandemic, and competitive dynamics as some of the key factors driving the need for regtech solutions, not only to meet regulatory requirements, but to minimise risk from misconduct and regulatory investigations.

Regtech solutions are increasingly being used to address risks from money laundering, terrorist financing, cybercrime, and data breaches, the report says. AML compliance is estimated to cost a combined USD 6.09 billion each year in Indonesia, Malaysia, the Philippines, and Singapore.

Cybercrime, meanwhile, costs the APAC region up about USD 160 billion annually. “Hackers are 80% more likely to target organisations in Asia, yet Asian organisations take 1.7 times longer than the global average to discover cyber breaches,” the report says.

In developed economies, despite the demand for regtech solutions and support from regulators, lengthy procurement processes, cumbersome IT and security approvals, implementation complexity, and resistance to change are some of the key roadblocks to regtech adoption in APAC, the report says.

In developing economies, regulatory inertia, lower technology and compliance standards, fewer incentives, and language challenges are cited as some of the key challenges to regtech adoption.

The report provides an overview of the regulatory initiatives and regtech trends for each of the markets covered in the study, also offering an outlook for each jurisdiction.

The report describes Ireland as a global hub for finance, technology and investor activity,  and a “hotbed of fintech innovation”. Irish regtechs offer a unique value proposition to financial services firms in APAC, it says.

Among the leading regtech firms from Ireland highlighted in the report are Fenergo, Know Your Customer Limited, Vizor, Corlytics, and others.

Launching the report, Ireland’s Minister of State for Financial Services Sean Fleming said he wants to further Ireland’s position as a leading hub for fintech and regtech development.

“I look forward to working with the Enterprise Ireland firms and their partners in Asia as together they deliver value and bring innovative responses to global compliance challenges.”