What is RegTech?
RegTech, short for Regulation Technology, refers to emerging technologies that help organizations modernize regulatory processes and ensure compliance. At its core, RegTech brings together custom software, automation, and artificial intelligence to make compliance faster, more accurate, and far less burdensome.
RegTech has become essential across industries facing intense oversight—finance, healthcare, food and drug, insurance, telecommunications, and many more—as well as any sector where consumer privacy, cybersecurity, and data stewardship are critical to both business operations and legal responsibility.
The RegTech industry is young but growing exponentially. Its global market is projected to reach US $22.2 billion by 2027, up from $6.2 billion in 2020—driven largely by the need for scalable, intelligent, and customized compliance solutions.
A brief history of RegTech
The Thomson Reuters Cost of Compliance Report revealed that over the previous decade the financial services industry had experienced a staggering 500% increase in regulatory rule changes, with a new update implemented every seven minutes. This led to a dramatic 60% jump in compliance costs and risk management spending.
As risk rose, so did the complexity of meeting regulations—and the urgency to keep up with changes while closing compliance gaps.
To understand how we got here (and why RegTech matters), we have to look back to the financial crisis of 2008. That moment spurred President Obama’s call for a “sweeping overhaul of the United States financial regulatory system,” culminating in the 2010 Dodd-Frank Financial Reform Act. It was a tipping point when historically underregulated industries became heavily regulated almost overnight.
At the same time, Artificial Intelligence (AI), Machine Learning (ML), and purpose-built compliance software were rapidly transforming nearly every sector, proving they could detect patterns, automate decisions, and scale operations far beyond manual capabilities.
RegTech emerged at this intersection. While early skepticism existed, its rise was inevitable: powerful new technologies were arriving exactly when companies needed a revolution in how they managed regulation and compliance. In particular, custom compliance platforms and AI-driven monitoring opened the door to real-time responsiveness that legacy systems simply couldn’t match.
Even though some Dodd-Frank restrictions were loosened in 2018, regulation has only grown more dynamic and complex—making RegTech indispensable.
RegTech today
In today’s technology-driven economy, compliance is getting thornier all the time. Regulations change faster, cover more ground, and often require more evidence of enforcement than ever before.
And no matter how challenging compliance may be, the risks of noncompliance are steep:
- Hefty penalties and fines
- Loss of client trust and reputation
- Potential legal action
- Heightened regulatory scrutiny
- Internal expense and downtime to investigate and remediate issues
RegTech meets this moment with automation, custom-built software, and AI, helping firms stay aligned with evolving regulations, streamline nearly every compliance workflow, and reduce operational and regulatory risk. Increased efficiency also lowers costs and frees teams to focus on higher-value work.
What can RegTech do—and what are the big benefits?
In a nutshell, RegTech tools save your organization time, effort, and money, while improving compliance outcomes and reducing risk.
RegTech harnesses digital technologies such as big data and analytics, cloud computing, AI/ML, blockchain, robotic process automation, smart contracts, and tailored compliance software to help your organization stay on top of regulatory changes in real time and adapt quickly.
Where siloed, labor-intensive, manual processes lead to inefficiency and human error, AI-enabled automation and custom workflow tooling can continuously monitor controls, flag anomalies early, and keep documentation audit-ready.
Some of RegTech’s main types and functions include:
- Compliance monitoring – ensuring staff follow internal policies and procedures, now often supported by AI-assisted oversight tools.
- Regulatory monitoring – tracking changes in regulatory laws and policies, with AI systems summarizing impact and routing alerts automatically.
- Risk assessment – using data, predictive analytics, and machine learning to forecast, quantify, and minimize risk.
- Tracking and reporting – generating audit trails and reports through custom software that fits your exact jurisdiction and business needs.
RegTech helps organizations:
- Protect data systems
- Prevent security breaches
- Avoid fraudulent activities (money laundering, etc.)
- Monitor transactions and identify irregularities using AI pattern detection
- Streamline reporting with automated, configurable outputs
- Gain a comprehensive view of data and processes
- Integrate diverse departments through shared data and improve organizational continuity
- Handle identity management and access control
- Conduct multi-layer monitoring across operations, vendors, and customers
Still, many companies aren’t using RegTech to its full advantage—often because off-the-shelf tools don’t match their real workflows, data realities, or regulatory environments.
How Lukasa helps
At Lukasa, we work alongside your existing team to identify pain points and solve your company’s most pressing compliance problems with custom, integrated, data-driven, AI-powered solutions.
We don’t just plug in generic tools—we build future-focused RegTech software tailored to your enterprise, designed to fit your risk profile, internal processes, and regulatory obligations. We’re insiders who understand the complexity of compliance—and the value of deploying the right AI, automation, and bespoke tooling in the right places.
Whether you need end-to-end compliance transformation or targeted automation for a specific pain point, Lukasa will help you implement the most effective RegTech strategy for your unique organization.
