Dr Bhumika Gambhir (Middlesex University Dubai, Lecturer); Tiara Sibi Lopez (Middlesex University Dubai, Student)

Introduction

The rise of the fintechindustry has opened up new opportunities in severalfields, including blockchain (especially cryptocurrencies), robo-advisors, digital paymentsystems, and peer-to-peer lending platforms. While these advanceshave improved efficiency and accessibility, they have simultaneously created risks and challenges, namely, cyber threatsand financial crime, data security, and regulatory complexities (Teichmann et al., 2023). Regulatory Technology (RegTech) has emerged as a responseto these issues, offering technological solutionsthat have enhanced compliance, risk monitoring, and supervision (Chao etal., 2022).

Regtech- The key features

The United Kingdom’sFinancial Conduct Authority defines RegTech as "a sub-set of Fintech that focuses on technologies that may facilitate the deliveryof regulatory requirements more efficiently and effectively than existing capabilities." RegTech facilitates compliance processes, reduces operational risks, and enhancesefficiency through advancedtechnologies such as artificial intelligence (AI), machinelearning (ML), blockchain, and big data analytics (Olaiya et al.,2024). These technologies enablefinancial institutions to automateregulatory reporting, monitortransactions in real-time, and ensure adherence to complex regulatory requirements(Liang, 2024).Supported by Artificial Intelligence, cloud computing, blockchain, Machine learning, Big data, and Data Mining& analytics, RegTechprovides early warningindicators for timely risk detection, helping financial institutions mitigate compliance risks and avoid regulatory penalties (Verdonk and Mulder, 2025). Some scholarssuggest that RegTechmay shape regulatory practices more than traditional authorities and could influence the evolution of money launderingmethods (Kurum,2023)

The Regtech Market

The global regtech marketwas valued at USD 15.80 billion in 2024 (Insight, 2025). According to industryestimates, the global RegTech market is expected to reach USD 21 billion by 2027, indicating a compound annual growth rate (CAGR) of approximately 20% (Verdonk and Mulder, 2025).The Big Four firms found the potential to offer Regtech services and came up with solutionsfor the growing market. The RegTechlab at Deloitte, the Regulatory Compliance Manager(RCM) at EY, the RegTech assistants at KPMG, and PwC's work with CUBE are just a handful of the numerousthings that the Big Four firms are doing. Table 1 shows the application of emerging technologies in RegTech.

Table 1- KeyEmerging Technologies and it’s Applications of RegTech

RegTech in the UAE

The UAE has positioned itself as a leaderin financial innovation, with a strongemphasis on digital transformation and regulatory compliance. The financialsystem in the countryis backed by a strong regulatory framework, which has played an importantrole in encouraging the adoption of RegTech solutions. The country'sAML framework is robust, with a focus on integrating crypto assets into the financial system while mitigating risks(Al-Tawil, 2023).

The UAE is quicklybecoming the next globalFinTech hotspot,with its FinTech market projected to reach USD 3.56 billion by the end of 2025 (Forbes,2025). The same pace is expectedfor the RegTech market, with a promising USD 608.5 millionvaluation by 2029 (GlobeNewswire, 2024).To capitalise on this growth, the Financial Services Regulatory Authority (FSRA) launched the RegTechinitiative in 2020, which was followedby Abu Dhabi Global Market’s (ADGM) adoption of RegTech, andanMOU with the UAE Ministry of Interior to combatfinancial crimes relatedto Virtual Assets(ADGM, 2021). The commitment to regulatory compliance was further evidenced when the FSRA of ADGM fined Aarna CapitalLimited USD 504 thousandin 2024 for inadequate Anti-Money Laundering systems (ADGM, 2024) . This highlights the UAE's stringent approach to implementingRegTech for compliance.

What Future holds?

The Regulatory Technology (RegTech) has emerged as a transformative force in the financial sector and beyond.It has openedup a wide range of opportunities across various roles and industries. In Finance industry,professionals can enhance their career opportunities by learningand building the required skillsin RegTech. When combinedwith expertise in finance, knowledgeof data analyticsand machine learningcan help with better risk assessment and compliance practices (CIMA,2024).

The growingcomplexity of regulatory requirements has significantly increased the demand for professionals skilled in interpreting and implementing regulatory frameworks. As RegTechsolutions become more integral to compliance operations and are driven by advanced digitaltechnologies, the need for cybersecurity specialists (Kunhibava et al., 2024) , data scientists (Butler and O’Brien, 2019) , and legal and regulatory experts (Firiza et al., 2024)isexpected to rise substantially in the coming years.

References:

ADGM. (2021), “FSRAissues report on regulatory technology”, FSRA, availableat: https://www.adgm.com/media/announcements/fsra-issues-report-on-regulatory-technology (accessed16 June 2025).

ADGM. (2024), “TheFSRA of ADGM Imposes a financialpenalty of USD 504,000 on Aarna Capital Limited (ACL)”,ADGM, available at: https://www.adgm.com/media/announcements/the-fsra-of-adgm- imposes-a-financial-penalty-of-usd-504000-on-aarna-capital-limited(accessed 16 June 2025).

Al-Tawil, T.N. (2023), “Anti-money laundering regulation of cryptocurrency: UAE and global approaches”, JournalofMoney Laundering Control,Emerald Publishing, Vol. 26 No. 6, pp.1150– 1164, doi: 10.1108/JMLC-07-2022-0109/FULL/PDF.

Butler, T. and O’Brien,L. (2019), “Understanding RegTech for Digital RegulatoryCompliance”, Palgrave Studies in Digital Business and Enabling Technologies, PalgraveMacmillan, pp. 85–102,doi: 10.1007/978-3-030-02330-0_6/FIGURES/3.

Chao, X., Ran, Q., Chen, J., Li, T.,Qian, Q. and Ergu, D. (2022),“Regulatory technology(Reg-Tech) in financial stability supervision: Taxonomy, key methods,applications and future directions”, International Review of Financial Analysis, North-Holland, Vol. 80, p. 102023,doi: 10.1016/J.IRFA.2022.102023.

CIMA. (2024),“RegTech improvesefficiency and compliance in accountancy | CIMA”, AICPA & CIMA, available at: https://myfuture.cimaglobal.com/career-insights/regtech-improves-efficiency/  (accessed16 June 2025).

Firiza, M.D.,Henderi, Lutfiani, N., Zahra,A.R.A. and Rahardja, U. (2024), “TheRole of RegTech in Automating Compliance and Risk Management”, 2024 12th InternationalConference on Cyber and IT Service Management, CITSM 2024,Institute of Electrical and Electronics Engineers Inc.,doi: 10.1109/CITSM64103.2024.10775610.

Forbes. (2025), “What Can FinTechLearn From The UAE’s Rise As The Next Hotspot?”, Www.Forbes.Com, availableat:www.forbes.com/councils/forbestechcouncil/2025/04/21/what-can-fintech-learn-from- the-uaes-rise-as-the-next-hotspot/ (accessed 16 June 2025).

GlobeNewswire. (2024), “United Arab Emirates Regulatory Technology BusinessReport”, ResearchAndMarkets.Com, availableat: www.globenewswire.com/news- release/2024/10/22/2966752/28124/en/United-Arab-Emirates-Regulatory-Technology-Business- Report-2024-2029-Deployment-Models-and-Compliance-Focus-Market-Share-and-Competitive- Analysis-Industry-Specific-Applications.html(accessed 16 June 2025).

Insight, F.B.(2025), “Regtech Market Size,Share, Trends & GrowthReport [2032]”, Https://Www.Fortunebusinessinsights.Com, available at: www.fortunebusinessinsights.com/regtech-market-108305 (accessed 16 June2025).