Financial Crime Compliance and Network Security Compliance Lead Regtech Funding

As we’ve previously observed, regulatory technology (regtech) funding is on an upward trend in recent years. If we look closer at the category level, we notice two key takeaways:

• The Financial Crime and Identity Compliance category leads the sector in Q3 funding
• The Network Security Compliance category leads the sector in all-time funding

We’ll highlight these observations with some graphics and discussions below.

The Financial Crime and Identity Compliance Category Leads Regtech Q3 Funding

To start off, let’s review the amount of funding raised this quarter by each category within regulatory technology.

Regulatory Technology Latest Quarter Category Funding

The above graphic highlights that the Financial Crime and Identity Compliance category leads the sector in Q3 funding with almost $90M. The Governance, Risk, and Compliance category follows in a close second with $83M in Q3 funding.

Financial Crime and Identity Compliance companies help financial institutions comply with regulations on identity related crimes. Their functions include client on-boarding, payment fraud, account takeover, and identity verification. Some example companies in this category are NetGuardians, Finomial, DueDil, and Feedzai.

Let’s now investigate how the regtech categories’ funding compare with each other historically.

The Network Security Compliance Category Leads the Sector in All-Time Funding

The graph below shows the all-time funding for different regulatory technology categories. The Q3 funding and growth rates of these categories are also highlighted.

Regulatory Technology Total Category Funding

As the bar graph indicates, the Network Security Compliance category leads regulatory technology in total funding at $1.5B. The Data and Privacy Compliance category follows in the second place with $1.2B in total funding.

Network Security Compliance companies help businesses comply with regulations around cyber-security risks. Some example companies in this category are Synack, HyTrust, AlgoSec, and SecurityScorecard.

In summary, the Financial Crime and Identity Compliance and Network Security Compliance categories are leading the sector in funding. Let’s see how the the rest of 2018 shapes up for regulatory technology!

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