6 trends to watch in RegTech in 2025

Financial crime and regulations are growing at an alarming rate, and Regulatory Technology (RegTech) providers are also evolving at the same rate to aid the financial industry in staying compliant and stopping illegal activities.

Bradley Elliott, CEO of Anti-Money Laundering (AML) platform RelyComply says the global market is expected to reach $25.19 billion by 2028.

RegTech is explained as the application of emerging technology to improve the way businesses manage regulatory compliance.

He gives RegTech trends that the financial industry can watch out for in 2025.

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AI adoption keeps accelerating

Elliott says they expect Artificial Intelligence (AI) to become even more central in RegTech come 2025.

Companies would need to invest in AI-backed automated monitoring that can detect behaviour patterns in real-time and flag anomalies indicating financial crime.

“[A report by] Gartner reveals that 60% of compliance officers plan to invest in AI-powered RegTech solutions by 2025.

“Legal frameworks like the AI Act in the EU and good practices in transparency, ethics, and bias minimisation are helping to boost confidence in the tech.”

Better understanding of digital assets

He adds that financial institutions have reduced involvement with blockchain cryptocurrencies, virtual currencies, the metaverse, and digital assets due to the lack of clear regulations.

Because of the risks of money laundering and other financial crimes, RegTech providers expect more rules to be created to define and categorize digital assets and currencies.

This could lead to higher adoption of crypto and other digital assets.

“By 2027, the World Economic Forum predicts that tokens stored on the blockchain could make up 10% of global GDP.”

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Putting protection first

Elliott says the General Data Protection Regulation (GDPR) encourages standardised, transparent ways to protect sensitive customer data.

He emphasises that RegTech platforms must be underpinned by robust data privacy, cybersecurity infrastructure, and strong risk management programmes.

“Effective due diligence on customers and their networks will require innovation in verification techniques during onboarding.”

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Adapting for quick-fire risk in the cloud

He adds that it is important for financial institutions to adopt a risk approach to monitor high-risk individuals or payments continuously.

“Migration to the cloud supports adopting a real-time, risk-based framework that manages compliance and reporting more efficiently, drives down costs and mitigates regulators’ concerns.

“With the cloud, regulatory data can be stored securely and analysed in one place, scale to the changing demands of regulations, and integrate easily with legacy systems.”

Maintaining sustainability

Elliot believes that environmental, social, and governance (ESG) principles matter more than ever for financial institutions.

“Sustainable finance comes with regulatory trapdoors, where falling foul of ESG risks can harm a financial institution’s public reputation.”

Cross-border and private-public cooperation efforts to redouble

“In line with the Financial Action Task Force’s (FATF) recommendations, we can expect closer cooperation across the ecosystem to manage a connected world’s compliance and financial crime risks.”

He adds that such links help institutions standardise their processes to follow global regulations, while also allowing regulators and governments to fight financial crime.

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