Why SaaS RegTech is The Best Solution for Automating Anti-Financial Crime and Compliance Processes  

Recent statistics show that financial crime is spreading like wildfire and giving rise to what many are now referring to as ‘The RiskOps Age.’ This is putting businesses on edge and business compliance teams on high alert.

According to the Q2 Financial Crime Report by Feedzai, online fraud rose from 232% from 2019 to 2021 as financial criminals have looked to capitalise on post-pandemic conditions and our increasing reliance on technology.

However, many businesses and organisations are now taking the necessary steps to improve processes and operational controls to help mitigate these risks in the future, by investing in anti-financial crime and compliance processes.

In this article, we look at the many reasons why SaaS RegTech is the best solution for businesses and organisations, who are looking to automate their anti-financial crime and compliance processes and review recent M&A activity within the RegTech space.

Financial Crime and The Rise of the RiskOps Age

A rapid rise in the number of digital customers due to rapid digital transformation and the surge in digital transactions, has led to a significant increase in levels of financial crime including cybercrime, fraud, money laundering, bribery and corruption.

In the UK alone, 64% of businesses have experienced fraud, corruption, or other economic/financial crime within the past 24 months. Further to this, in the last two years, over 31% of external perpetrator cases were the result of hackers, with many exploiting new technologies being deployed by companies.

As a result of this, RegTech companies are now collaborating with financial institutions and regulatory bodies, using cloud computing and big data to share information.

The Role of SaaS RegTech in Tackling Financial Crime

RegTech is the use of technology to manage the regulatory processes within the financial industry, which harness the power of big data, artificial intelligence and blockchain to reduce financial risk. The main functions of RegTech include regulatory monitoring, reporting and compliance.

According to Verified Market Research (VMA), RegTech is projected to become a nearly $87 billion industry by 2028 and is rising in popularity, because of the technologies’ potential to fundamentally transform how financial services participants perform their compliance obligations. Key factors also influencing the growth of the market include the introduction of new financial regulations, increased penalties and personal liability, and a significant rise in the number of fraudulent activities.

With the use of big data and machine-learning technology, RegTech reduces the risk to a company’s compliance department by offering data on money laundering activities for example. It can also monitor transactions that take place online in real-time to identify issues in the digital payment sphere.

Recent M&A Activity in the RegTech Space

Financial Institutions are increasingly keen to understand the potential risks and are coming up with innovative solutions. They are taking action to avoid potential risks by using, acquiring and investing in automated SaaS RegTech software solutions.

In 2021, the total value of venture capital, private equity, and M&A transactions in the RegTech sector was $9.9 billion with the number of deals reaching a record high of 312.

 Moody’s Corporation recently acquired Passfort, the SaaS RegTech provider of automated anti-financial crime and compliance processes. Meanwhile, Fenergo, a provider of digital solutions for Know Your Customer (KYC) and lifecycle management (CLM), recently acquired RegTech company, Sentinels, an anti-money laundering (AML) transaction monitoring new market entrant, with artificial intelligence-based technology.

Next Steps

If you are a financial technology company selling software, SaaS, or consulting services to financial institutions, we are your go-to mergers and acquisitions firm. We’ll help you throughout the whole sell-side or buy-side process. Find out more by contacting one of our expert M&A Advisors here.

Or view our latest FinTech M&A Review which provides a detailed overview of recent M&A transactions in the FinTech space here.

Author: Chris Brooke


Highly-experienced M&A advisor with a particular emphasis in the Fintech sector, market data and analytics including ESG (Environmental, Social and Governance) software and data globally; assignments include working with leading privately held and listed businesses covering the Fintech, market data and ESG spectrum. In my career spanning more than 25 years, I have advised on Fintech M&A transactions in over 17 countries throughout the world. I work with both buyers and sellers of businesses in Fintech.

I held senior positions in business and corporate development, marketing, and product management in several Fintech companies prior to Goldenhill.

If you are an owner or senior executive of a Fintech business interested to discuss how M&A could help you accomplish your objectives – please get in touch.