PR90237

TOKYO, June 23, 2021, /PRNewswire=KYODO JBN/--

- Enterprise Ireland uncovers APAC regtech landscape in new 'The State of

Regtech in APAC' report [

https://irishadvantage.com/state-of-regtech-apac-report?utm_medium=offline&utm_source=PR-outreach&utm_campaign=regtech-report-apac

].

- Developmental divide between developed and developing economies cited as key

area of concern for regtech sector in the future.

Regtech in Asia Pacific (APAC) faces the difficult challenge of bridging the

divide between developed and developing economies in the region, according to a

report released today by the Irish government's trade and innovation agency

Enterprise Ireland [https://irishadvantage.com/ ], ranked one of the world's

most active VC investors, including fintech. The divide was particularly

highlighted as the effects of Covid-19 accelerated the demand for the adoption

of regtech solutions in the region.

The report, entitled The State of Regtech in APAC, provides the most

comprehensive, independent analysis available on the adoption of regtech across

10 key APAC markets of Australia, Mainland China, Hong Kong, Indonesia, Japan,

Malaysia, Philippines, Singapore, Thailand, and Vietnam. Enterprise Ireland

commissioned Kapronasia [https://www.kapronasia.com/ ], a leading Asian

financial technology market research and consulting firm, to develop the report

which identifies the latest opportunities and roadblocks facing regtech players

in each of these markets.

Launching the report today, Ireland's Minister of State for Financial Services

Sean Fleming said: "I welcome this comprehensive regtech report from Enterprise

Ireland. It captures the essence of what the Ireland for Finance Strategy is

looking to achieve and the unique value proposition that Ireland offers to

firms in Asia Pacific and across the globe. As Minister with responsibility for

International Financial Services, I want to consolidate and accelerate our

position as one of the world's leading locations 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."

It has been forecasted that the global regtech market will grow from USD$6.3

billion in 2020 to USD$16.0 billion by 2025, a rate of over 20% per year, with

APAC expected to have the highest growth rate over this period.[1] The

projected growth of the sector is in tandem with the booming fintech scene in

the region, particularly in Southeast Asia which saw an estimated USD$1 billion

worth of investments in 2019.[2]

While APAC is home to some of the world's major financial centres, the

non-homogenous region demonstrates varying levels of market development. In

developed economies such as Hong Kong, Singapore, Sydney and Tokyo, regtech

uptake is driven by a sophisticated financial ecosystem and a complex

regulatory environment. The need for governance and accountability, the

emergence of new market participants and security concerns arising from

disruptive technologies such as artificial intelligence and distributed ledger

technology give regulatory impetus for regtech adoption.

This contrasts with developing economies where regtech uptake is driven by the

sector's promise in helping to create financial inclusion. Uptake is also

reliant on business cases and under-resourced regulators in these markets. With

that said, market interest for regtech solutions in these economies is not as

strong as their developed counterparts. This can be attributed to regulatory

inertia and a marked difference in fundamental behaviours and attitudes towards

regtech.

Developing economies however stand to mature over time – while technology

ecosystems in developed and developing economies will continue to evolve at an

increasingly varying pace, given differing regulatory drivers for regtech

adoption. This is especially evident in the wake of the Covid-19 pandemic that

has further reinforced differing domestic priorities and exacerbated the

economic and technology gap in APAC.

"Covid-19 compelled financial services sector to see the value of

digitalisation as a necessity. It has become a way for organisations to improve

their services in response to changing business and consumer needs. The need

for regtech solutions also expands far beyond the financial services sector

which is why this sector is growing so rapidly. This report is a compendium for

anyone in the regulatory, risk or compliance functions of any company in the

region, as well as for regtech companies which are looking to scale and expand

into Asia Pacific," explained Mo Harvey, Enterprise Ireland's Financial

Services and Fintech Lead (Asia Pacific).

"Asia Pacific continues to be a strategic region, not only to Ireland which is

home to many regtech specialist companies but to the world. At Enterprise

Ireland, we share the commitment to support the development of a vibrant global

regtech segment and contribute to the global regtech ecosystem, and we hope

that this report will provide valuable insights into the complexity of the

sector as we continue to prime many companies for success and long-term growth

in the region," she added.

Brian Tang, co-chair of the Fintech Association of Hong Kong's Regtech

Committee and co-convener of the APAC RegTech Network that brings together the

Regtech committees of the fintech associations of Hong Kong, Singapore, Japan

and Malaysia said, "Regtech is a secret sauce that empowers financial

institutions, fintechs, virtual asset service providers and beyond. All such

institutions, and their regulators and users, across the Asia-Pacific benefit

from innovative, efficient and cost effective regtech solutions to combat

financial crime and drive efficiencies and financial inclusion, regardless of

origin of such technology solutions."

"However, the journey to adoption is certainly not a straightforward one. We

congratulate Enterprise Ireland for making this comprehensive report on the

state of Regtech in APAC publicly available so that Regtech solution providers

from across the globe, as well as APAC policy makers, can benefit from its

findings to help drive further regtech adoption in the region," he added.

Key Regional Highlights:

Some insights from the report's overview include:

- Impact of Covid-19

Covid-19 accelerated the transition to digitisation of financial services,

particularly in the regulatory, risk and compliance sectors.  

- Compliance Costs Expected to Rise

The projected cost of AML compliance across Indonesia, Malaysia, the

Philippines, and Singapore combined is estimated at US$6.09 billion annually,

with more than half of it in Singapore.

- Impact of Regulators Across APAC

Country-specific regulators have the most impact on regulatory compliance, but

Singapore's regulators also have substantial impact across APAC study countries.

- Regtech Adoption

Progress in regtech solutions in Developed APAC countries is starting to gain

speed, driven by regulators' need for greater oversight and a tighter

regulatory environment.

- Promising Areas for Regtechs

Market and industry drivers such as the rise of digital banks, P2P lending,

digital assets and remote onboarding present an opportunity for regtechs to

fill the need for specialised solutions.

- Changes in Regulation

Changes in regulatory stance puts increased focus on compliance and using new

technology to meet standards more efficiently and effectively.

- Roadblocks and Challenges

Long sales cycles challenge regtech adoption in Developed APAC while regulatory

inertia and lack of proper regulatory processes can hinder regtech adoption in

Developing APAC.

The State of Regtech in APAC report is available to download here [

https://irishadvantage.com/state-of-regtech-apac-report?utm_medium=offline&utm_source=PR-outreach&utm_campaign=regtech-report-apac

]

[1] https://a-teaminsight.com/a-new-frontier-of-regulation-asia-takes-the-lead

[2] https://www.worldbank.org/en/publication/wdr2016/Digital-Adoption-Index

Photo -

https://mma.prnewswire.com/media/1538668/Enterprise_Ireland_Mo_Harvey.jpg  

Photo -

https://mma.prnewswire.com/media/1538666/The_State_of_Regtech_in_AsiaPac.jpg

SOURCE: Enterprise Ireland