How Behavox uses AI to transform RegTech & US RegTech deals plummet 37% in H1

How Behavox is leveraging AI to transform its RegTech offering

Founded in 2014, Behavox is a global leader in AI-powered compliance, security, and archiving solutions. Headquartered in London with offices in New York, Montreal, Singapore, the company helps organisations secure their communications data and monitor regulatory, conduct, and insider threat risks.

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Research highlight

Karma Check secured the largest US RegTech deal in H1 as funding declined 18% YoY

• United States RegTech funding dropped by 18% in H1 2024 YoY
• California emerged as the top state with 40% of the top 10 deals taking place in the region
• Norm AI, an emerging leader in AI-powered regulatory compliance, announced its arrival to the US RegTech market with a Series A funding round of $27m

In first six months of 2024, the U.S. RegTech sector saw 137 deals, a steep decline of 37% from the 218 transactions recorded in H1 2023, and a 30% drop from the 195 deals completed in H2 2023. Despite the decrease in deal volume, total RegTech funding in H1 2024 amounted to $3.08bn, marking a 18% decrease from the $3.76bn raised in H1 2023 and a 5% drop from the $3.23bn raised in H2 2023. This suggests that while the number of deals has declined significantly, there is still considerable investment in larger funding rounds. The shift to larger deals could be a response to market consolidation and growing demand for more comprehensive regulatory technology solutions.

The top 10 deals in H1 2024 were spread across five states, with California emerging as the clear leader, securing four top deals—up from just one in H1 2023. Massachusetts maintained its position with two top deals, the same as in H1 2023, reflecting its continued prominence in the U.S. RegTech landscape. Florida and New York, both of which had two top deals each in H1 2023, saw reduced activity, with each securing only one top deal in H1 2024. Meanwhile, Virginia made its debut in the top 10 with two major deals, signalling the state's growing significance in the sector. Texas and Washington, which each had one top deal in H1 2023, were absent from the list in the first half of 2024.

Norm AI, an emerging leader in AI-powered regulatory compliance, announced its arrival with a $27m Series A funding round led by Coatue, with participation from Bain Capital Ventures, Blackstone Innovations Investments, Citi Ventures, and others. Over the past 11 months, Norm AI has raised over $38m from institutions managing more than $5.75tn in assets. Norm AI has developed the first platform that translates government regulations into computer code, enabling companies to automate compliance analyses efficiently and accurately using Regulatory AI Agents. These AI-powered agents convert regulations into executable programs, allowing businesses to ensure compliance with greater speed and precision. Already deployed by Fortune 100 companies, Norm AI is transforming how industries like insurance and asset management handle regulatory assessments, reducing the time spent on compliance from days to minutes. This new funding will help Norm AI expand its platform and further integrate AI into compliance processes, positioning the company as a pioneer in the RegTech space.

RegTech news

• The key challenges for machine-readable and executable regulation - As the age of digitalised regulation comes closer into the view, there is growing discussion around the role of machine-readable and executable regulation in the financial industry. Read the full story here.
• Navigating new compliance horizons: GDPR meets EU AI regulation - Since its inception in May 2018, the GDPR has set a global benchmark for data protection laws, ensuring organizations respect the privacy of EU residents. Read the full story here .
• The essential red flags to help detect financial fraud - Have you ever pondered how fraudsters access people’s hard-earned money through deception? This is typically achieved by exploiting vulnerabilities and employing deceptive strategies. A telltale sign of fraud can be unusual account activity, such as sizeable transactions or frequent alterations in personal details. Recognizing these common red flags could help you safeguard against becoming a victim. Read the full story here .

Regulation news

• T-Mobile settles for $31.5m with FCC over data breaches -?T-Mobile has agreed to a $31.5m settlement with the FCC following a series of data breaches that exposed the personal information of numerous US consumers. Read the full story here .
• New APP fraud protections roll out with significant changes for consumers - Starting today, new protections for victims of APP fraud are now in effect, marking a pivotal day for consumer safety in financial transactions. Read the full story here .
• TSB Bank hit with ￡10.9m fine over unfair customer treatment - Britain’s TSB Bank has been fined ￡10.9m by the markets watchdog for its failure to treat customers who were in arrears fairly. Read the full story here .

RegTech Deal news

• PinnaclePay links up with Flagright to boost compliance and security - PinnaclePay, a provider of B2B financial services, has enhanced its compliance and risk management strategies by integrating Flagright’s advanced AML solutions. Read the full story here.
• XBO.com and Muinmos forge alliance to boost crypto compliance and security - XBO.com , a crypto exchange platform, has entered into a strategic partnership with Muinmos , a pioneer in automated compliance solutions. Read the full story here .
• Treasury Prime and ComplyCo join forces to enhance bank regulatory oversight - Treasury Prime, a banking software leader, has announced an integration with ComplyCo, a specialist in regulatory compliance. Read the full story here .

CyberTech news

• Prime Security raises $6m to pioneer AI-driven design-stage security solutions - Prime Security , a pioneering security firm, has just transitioned from stealth mode. Read the full story here .
• Blueprint Equity leads $7m investment in cyber platform CYRISMA - CYRISMA , a pioneering cybersecurity platform, has recently announced a $7m Series A funding round. Read the full story here .
• Owl Cyber Defense secures strategic refinancing from Marathon Asset Management - Marathon Asset Management has successfully closed a senior-secured credit facility aimed at refinancing Owl Cyber Defense, a firm recognized for its leadership in Cross Domain Solutions (CDS) and Data Diode technology. Read the full story here .

Other RegTech news

• How artificial intelligence is redefining identity verification processes - Identity verification is a critical safeguard in the digital age, serving as a primary defence against fraud and ensuring that only genuine customers access services. Read the full story here .
• The rising influence of double materiality in ESG reporting - ESG reporting is undergoing a transformation, evolving from a regulatory necessity to a significant driver of business innovation and competitiveness. Read the full story here .
• Navigating DORA compliance: The journey towards enhanced financial resilience - With only three months left until DORA becomes enforceable, the AFME has highlighted significant readiness challenges. Read the full story here .