Beyond Price: Making Smart Buying Decisions in the Commoditized Compliance Market

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The compliance market has undergone a significant transformation over the past decade. Once dominated by a handful of specialized providers, it is now crowded with new entrants. Advances in automation, artificial intelligence (AI), and cloud-based technologies have lowered the barriers to entry, making it easier for new players to enter the field. However, this abundance of solutions presents a critical challenge: not all compliance tools offer the same level of quality. In this blog, we’ll explore why businesses must approach this crowded market with caution—caveat emptor—and how to make smart, informed decisions in an environment filled with look-alikes and copycat offerings.

Historical Dominance by Large Compliance Providers

In the past, the compliance market was largely dominated by a few well-established firms, companies like Thomson Reuters, LexisNexis, and Wolters Kluwer provided comprehensive compliance solutions to financial institutions, often through expensive, bespoke services. These companies control(led) large portions of the compliance market due to their ability to offer solutions that cover regulatory requirements across multiple industries and jurisdictions.

In addition, the traditional model for compliance involved custom-built solutions that were expensive and tailored to the specific needs of each business. Firms like Deloitte and PwC would work closely with clients to create unique compliance frameworks that meet regulatory standards. For many businesses, especially those in highly regulated sectors like finance and banking, this was the only option available if they wanted to remain compliant. The high cost of compliance solutions (both in terms of development and maintenance) meant that only sizable companies could afford to provide and use these services.?

As businesses sought more flexible, scalable, and cost-effective compliance solutions, they began moving away from the high-cost, custom-built services traditionally offered by large providers. This shift created an opportunity for a new wave of compliance solutions, powered by advances in automation, AI, and cloud technologies, that could deliver efficiency at a lower cost.

Increased Demand for Scalable and Cost-Effective Compliance Solutions

The rise of fintechs has caused a shift in how businesses approach regulatory requirements and compliance solutions. With leaner structures and smaller budgets than traditional financial institutions, fintech companies have driven the demand for more affordable, scalable, and automated compliance solutions. New compliance technology providers offered SaaS-based, modular solutions at lower costs than traditional models. While new solutions emerge, they often leverage the data and infrastructure of legacy providers, effectively bridging the gap between traditional and modern compliance technologies.

As fintechs faced these challenges, the need for flexible and scalable compliance solutions became even more urgent, prompting rapid adoption of RegTech tools across various global regions. The Regulatory Technology (RegTech) market has experienced remarkable growth over the past decade valued at $5 billion in 2018. Currently valued at approximately $12.34 billion in 2023, the market is expected to surge to $85.92 billion in 2032, with projections indicating a compound annual growth rate (CAGR) of over 24% from 2024 to 2032. Cloud-based RegTech platforms have become especially appealing to fintech companies, enabling them to meet regulatory standards without the overhead costs associated with traditional compliance vendors.

In Africa, fintechs like Flutterwave, M-Pesa, and Paystack have adopted agile compliance systems to navigate diverse regulatory environments. For instance, countries like Kenya and Nigeria have only recently formalized fintech regulations, requiring these companies to be nimble in adapting to new rules. Similarly, in Southeast Asia, fintechs in countries like Indonesia, Vietnam, and Thailand are grappling with regulatory ambiguity, compounded by the absence of comprehensive financial services regulations.?

In Latin America, RegTech adoption is growing rapidly, with countries like Brazil, Mexico, and Colombia utilizing these technologies to address regulatory challenges, particularly in the realms of Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance. The Latin American RegTech market, projected to grow from $969.09 million in 2023 to $2.99 billion by 2029, reflects a CAGR of about 20%, highlighting the region’s increasing reliance on RegTech solutions to meet evolving compliance needs.

These regional challenges and the growing demand for effective compliance tools have paved the way for a new wave of compliance solutions, where the primary focus shifted from bespoke, expensive models to more commoditized, cost-effective options.

The Commoditization of Compliance Tools: Low Barriers to Entry

Once a product becomes commoditized, the primary differentiators move from quality and service breadth to price and speed. As the compliance market becomes saturated with similar offerings, competition intensifies, and standing out becomes a challenge. As a result, buyers are increasingly evaluating compliance solutions based on explicit costs—such as the price of a single KYC/B check or AML screening, the frequency of database updates, and geographical coverage. Providers often claim the same features - real-time data updates, coverage across 200+ countries and territories, and the ability to verify thousands of IDs across various types.

Focusing solely on individual checks, like KYC, overlooks the full scope of compliance. For growing businesses, compliance involves managing the entire client lifecycle—from onboarding to transaction monitoring, risk assessment, and reporting. Relying on fragmented solutions creates gaps in the compliance framework, risking regulatory issues and inefficiencies.

Below are some of the questions buyers should be asking:?

• What workflows and frameworks are essential for my business to maintain regulatory compliance across all markets and jurisdictions? How much of this can be automated?
• Does solution “X” support the entire client lifecycle, from onboarding to ongoing monitoring? Can I quantify the potential savings from using this solution? Are case studies or calculators available to help assess the value?
• Is the solution adaptable to evolving laws and standards across different regions and industries? How are regulatory updates handled—automatically or manually?
• What types of data were used to train the solution's model—synthetic or real-world data? How frequently are the datasets updated to ensure accuracy?
• Does the solution encompass document management, transaction monitoring, audit reporting, and data reconciliation throughout the entire client lifecycle?
• How easily does the compliance tool integrate with other systems we already use, such as CRM, ERP, or financial platforms?
• Does the solution offer a no-code, user-friendly integration process to avoid technical roadblocks and speed up implementation?
• How much of the compliance process is automated with this solution compared to others on the market? Does it minimize manual intervention in key areas such as KYC, AML checks, and ongoing monitoring, enabling my team to focus on more critical due diligence tasks?

While compliance providers may initially appear cost-effective, their fragmented approach—offering only one or two core functions of onboarding and client lifecycle management (identity, document, and transaction management)—often leads to higher manual intervention costs and delays in revenue recognition. Relying on multiple providers creates inefficiencies that slow down sales cycles, onboarding, auditing, and data reconciliation, ultimately driving up operational costs.

The opportunity cost of piecemeal compliance solutions far outweighs the savings per transaction or check. By focusing on isolated compliance tasks instead of a unified, end-to-end solution, businesses risk delays in revenue generation as backlogs grow. While sales teams close deals, it’s compliance that ultimately drives revenue. Without a streamlined, automated process, businesses not only face delays in realizing revenue but also create friction for customers during onboarding. The most successful compliance providers will offer comprehensive, integrated solutions that manage risk, maintain regulatory compliance, and streamline workflows from identity verification to transaction management throughout the client lifecycle.

Beyond Commoditization: The Need For End-to-End Compliance Management

New-generation compliance platforms leverage artificial intelligence and automation to transform how businesses manage regulatory requirements. By combining identity verification, document management, and transaction monitoring into unified systems, these platforms enable real-time cross-verification for a comprehensive view of compliance operations. Additionally, key workflows and compliance reasoning are automated, often using advanced AI technologies.

These platforms are designed for scalability and accessibility, with no-code integration features that allow businesses to embed compliance functions without technical expertise. This approach empowers organizations to scale compliance operations efficiently. Many platforms also offer white-label capabilities, enabling businesses to either use branded solutions directly or resell them, effectively turning compliance from a cost center into a revenue-generating asset.

In the data age, the future of compliance technology lies in platforms that fully leverage the data accumulated throughout the client lifecycle. By using this data for cross-verification, businesses can meet regulatory standards while improving customer satisfaction, enabling product customization, and uncovering upselling opportunities.

As Warren Buffett wisely said, "Price is what you pay, value is what you get." Focusing on price alone—whether paying too much or too little—does not always deliver the best value. A well-priced, integrated solution provides far greater long-term efficiency, scalability, and growth than fragmented alternatives. By making informed, thoughtful decisions, business leaders can harness compliance to drive growth.

About the Author

Appo Agbamu, CFA is the Founder and CEO @ Ahrvo Labs Inc. Ahrvo develops, markets, and sells compliance, payment, and banking solutions. Appo earned a B.Acc. in Accounting and a BBA in Economics, w/a minor in Financial Markets from the University of Minnesota. In addition, Agbamu is a Chartered Financial Analyst (CFA) charterholder.

About Ahrvo Labs

Modernize your payment, banking, and compliance infrastructure with Ahrvo Network's enterprise platforms. Ahrvo Comply integrates 20+ production-ready modules for identity, document, and transaction management, while our Portable Identity Gateway streamlines financial service access—turning multiple KYB onboardings into one reusable process across 800+ institutions. Learn more @ https://ahrvo.com