The essential guide to KYB verification & US RegTechs assert deal dominance in H1

The essential guide to Know Your Business verification processes

KYB, or Know Your Business, is an essential process for businesses engaging with other companies. It serves as the backbone of safe, compliant third-party relationships, enabling firms to assess and manage potential risks before formalizing business agreements.

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Research highlight

US dominated global RegTech deals as funding dropped by 25% in the first half of 2024

Key Global RegTech investment stats in H1 2024:

? Global RegTech funding dropped by 25% in H1 2024 YoY

? US asserted its dominance in the market by securing 60% of the top 10 deals

? IDfy secured a $27m funding round to be the only Asian country featured in the top 10 deals for H1 2024

In H1 2024, the global RegTech sector recorded 246 transactions, marking a significant decline of 45% from the 444 deals completed in the same period in 2023 and a 30% drop from the 351 deals in H2 2023. Despite the sharp drop in the number of deals, total RegTech funding in H1 2024 amounted to $3.89bn, reflecting a 25% decrease from the $5.16bn raised in H1 2023 and a 22% drop from the $4.98bn raised in H2 2023. This notable decrease in funding and deal volume suggests an industry-wide contraction, potentially driven by investor caution and macroeconomic uncertainties affecting the RegTech sector.

The top 10 deals in H1 2024 were dominated by the United States, which secured six top deals, mirroring its position in H1 2023. However, there were notable shifts in the other top countries. India and Canada appeared on the list for the first time, each securing one top deal, while Sweden also made its debut in the top 10. In contrast, the Netherlands, Israel, and France, which had each secured one top deal in H1 2023, were absent from the H1 2024 list. The United Kingdom maintained a presence in both periods, reflecting its continued strength in the RegTech space, while the changing country mix underscores the evolving geographical distribution of large deals within the sector.

Mumbai-based IDfy, a leader in fraud prevention and trust establishment, marked a significant milestone by securing a $27m fundraise, making it the only Asian company to feature in the top 10 RegTech deals for the first half of the year. Backed by Elev8, KB Investment, and Tenacity Ventures, this round of funding supports IDfy’s mission to combat fraud through AI/ML-powered verification solutions, performing over 2 million verifications daily. Founded in 2011, IDfy serves over 1,500 clients across sectors like BFSI, e-commerce, and FMCG, with a client list that includes major names like HDFC Bank, Zomato, and American Express. The funds will further enhance IDfy’s expansion and product development, solidifying its presence across India, Southeast Asia, and West Asia.

RegTech news

• Streamlining compliance: Best practices for anti-bribery measures in banking - Banks are increasingly turning to third-party relationships to tap into new technologies, services, and markets. Read the full story here.
• Beyond the metrics: Understanding what ESG scores can and can’t do - The debate surrounding the acronym of ESG has evolved from divisive to disappointing within the financial services sector. Read the full story here.
• Enhancing trust and compliance in business networks through effective KYB strategies - Corporate onboarding encompasses processes critical for meeting regulatory demands, including AML compliance and thorough business verification to prevent financial crime. Read the full story here.

Regulation news

• PSR Iintroduces ￡85k cap for APP scam victims starting October -?PSR has announced a new reimbursement cap for victims of Authorised Push Payment (APP) scams, setting the maximum limit at ￡85,000. Read the full story here.
• Hong Kong and Dubai strengthen ties in sustainable finance with new agreement - The HKMA and the DFSA have taken a step towards strengthening sustainable finance by hosting their first Joint Climate Finance Conference. Read the full story here.
• OPBAS reports uneven progress among anti-money laundering supervisors - The OPBAS, functioning under the FCA, has identified ongoing inconsistencies in the supervisory efforts of the UK’s PBSs in combating money laundering. Read the full story here.

RegTech Deal news

• Lucinity and Resistant AI forge dynamic partnership to combat financial crime - Lucinity, an AI-powered financial crime investigation platform, and Resistant AI, experts in detecting fraud and money laundering, have joined forces. Read the full story here.
• CIBC backs Sayari with $40m to boost global commercial risk intelligence operations - Sayari, a counterparty and supply chain risk intelligence platform, has been granted an undrawn $40m revolving credit facility by CIBC Innovation Banking. Read the full story here.
• Tamnoon secures $12m Series A for pioneering hybrid human-AI cloud security service - Tamnoon, a leader in Managed Cloud Security Remediation, announced today that it has secured $12m in Series A funding. Read the full story here.

CyberTech news

• Blackpanda secures $6.7m in strategic investment to bolster cyber resilience in Asia - Blackpanda, a leader in cyber emergency response based in Asia, announced a strategic funding boost of $6.7m today. Read the full story here.
• Enginsight secures €6m to bolster cybersecurity for German SMEs - Enginsight, a seasoned German provider of an all-in-one cybersecurity platform, has successfully concluded a new funding round, securing €6m. Read the full story here.
• How US banks are struggling to keep up with cybercriminals - A recent study conducted by RedCompass Labs has revealed a concerning lag in how U.S. banks are keeping pace with criminals. Read the full story here.

Other RegTech news

• Essential steps for verifying your UAE business in 2024 - The KYB framework is vital for verifying the legitimacy and integrity of a business entity, ensuring that it adheres to legal and regulatory standards. Read the full story here.
• The critical role of enhanced due diligence in AML compliance - Enhanced Due Diligence (EDD) represents an advanced level of scrutiny, serving as a crucial component beyond basic KYC checks. Read the full story here.
• How FinCEN’s new AML/CFT proposal leverages AI for better compliance - In a move to modernize AML/CFT frameworks, the U.S. Department of the Treasury’s FinCEN has unveiled a proposal under the Anti-Money Laundering Act of 2020. Read the full story here.