5 RegTech Companies in APAC with the Potential to Disrupt the Financial Industry

Regulatory Technology - the new buzzword. RegTech, as a branch of Fintech, is transforming the way businesses deal with regulatory compliance. Regulators are enforcing stricter laws since the global financial crisis, while the public is holding higher expectations on banks’ regulatory performance, financial institutions have to amp up their game in navigating regulations and hence RegTech adoption trend took off. The Hong Kong Regtech Map 2020 shows just an excerpt of this booming industry in our community. With the capabilities of RegTech, companies can comply with laws and regulations and reduce regulatory risks at a lower cost and higher effectiveness. Regarding RegTech, SuperAcc has made an article all about Why Financial Professionals should care about RegTech, where you will find everything you need to know about this growing industry.

APAC is highly suitable for RegTech adoption, and here’s why

First off: Growing Regulatory Demands

With the objective to increase financial transparency after the global financial crisis, regulators have imposed more regulation on financial institutions. APAC’s financial institutions find themselves in face of a flux of regulatory laws and high complexity in compliances. Moreover, the interpretation and application of these rules vary between regions. This poses huge challenges for them to comply with local and global legislation while balancing costs.

And with that: Strong Financial Foundation

APAC banking region is the world’s largest regional banking market, reaching maturity and awaiting a breakthrough. Let’s take a look at APAC’s biggest economies

China’s financial market begins to open up. The rapidly growing country prioritizes on mutual boosting of domestic and foreign markets. It also opened up possibilities for investment schemes and foreign firms to expand into this attractive economy.

Australia’s banking sector has the resilience to withstand great economic contraction. The virus-related obstacles and friction in international politics cause some setbacks to Australia’s economy. Even under elevated risks, the economy resists this shock and commences its steady recovery.

Singapore’s investments are moving online under the pandemic. Not only did Singapore's financial industry stay strong despite the virus situation with the agile response by their government, customers quickly transitioned their investment actions from offline means online. This kept their economy thriving.

The growth of the APAC market is gradually reaching a bottleneck due to the rising risk costs since the global financial crisis. Hence, these financial institutions are actively reaching out to novel solutions to manage their risks in a cost-effective manner. Hence, RegTech started its steady climb since 2008.

Last and most important: Great Support for RegTech Solutions

There are a few factors that strengthen the support for RegTech development in the APAC region.

Regulators and Governments in Asia have put in great effort to push forth RegTech adoption to meet regulatory standards. Hong Kong regulator HKMA has designed a 2-year roadmap on RegTech acceleration and implementation and illustrated the reason behind them doing so. The capabilities of RegTech will expand at a speedy rate under such encouragement. The Hong Kong Government has released a Proof-of-Concept Subsidy Scheme to encourage collaboration between financial institutions and fintech startups to work on novel solutions.

Investments in Asia have also turned their heads towards this branch of FinTech, as they put emphasis on regulatory compliance and fraud prevention. Reports have found that financial institutions in APAC are estimating an average of USD83.3 million budget on new fraud prevention technology in 2021. Fintech investments in Singapore alone have reached USD$371million in 2020, and these numbers will only rise. With the strong technological support under such hefty investments, the rate of RegTech evolution will soar in the foreseeable future.

What are some Regtech companies in APAC with great potential?

1. Backpack

Based in Singapore, Backpack provides SaaS solutions for the back office of financial services firms. They enhance CRM for functions such as compliance, financial services, payment aggregators, and more. Using AI-powered digital assistants and in-app chat, Backpack enables businesses to replace the current complex workflows.

2. Superacc

Hong Kong-based Apoidea developed Superacc which utilizes deep learning and natural language processing to extract tables and insights from raw financial statements, which often consist of unstructured data. This data extraction automation can save 90% of data entry time in addition to the salary cost saving. With the super-human level entry accuracy, Superacc Financial Statement Robot is the up and coming transformation partner in the financial services industry.

SuperAcc is also a company under Cyberport's incubation program. In the last two years, they have successfully implemented our AI solution with 10+ financial institutions including investment banks, commercial banks, and other financial institutions.

3. Edgelab

Edgelab performs extensive risk analytics and constructs portfolios for private banks. Partnered banks are able to not only deliver the best investment for clients but are also equipped to automate reports and regulatory controls. Edgelab uses API-based, modular technology to help integrate into banks’ existing systems, and it is completely customizable.

4. Gekko lab

The Hong Kong-based startup Gekko Lab utilizes AI to help companies monitor capital market information. With the organization and quantification of announcements from listed companies, as well as tracking history databases, Gekko Lab uncovers hidden market insights. Gekko contributes to the Regtech field with its market anomalies detection function, which allows for a holistic view of the behaviors of market participants.

5. Membercheck

The Australian Membercheck provides solutions for checking current and prospective clients against PEP (politically exposed person) and global sanction lists. It enables organizations to access complete profile matches, easily establish a whitelist to avoid future false-positive results, as well as record due diligence decisions. Membercheck uses a secure web-based platform that sources data from credible origins such as Acuris Risk Intelligence and its services are delivered to clients in intuitive manners.