Over 90 investors participated in RegTech funding rounds in Europe during H1 2023 and Navigating the ESG landscape: Are financial institutions ready?

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Navigating the ESG landscape: Are financial institutions ready?

The world of Environmental, Social, and Governance (ESG) compliance is becoming increasingly intricate and crucial for financial institutions (FIs). Amid this rapidly changing landscape, where sustainability and responsible investing have taken centre stage, FIs find themselves under mounting pressure to navigate these challenges effectively.

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Research highlight

Over 90 investors participated in RegTech funding rounds in Europe during H1 2023

?European RegTech has had a strong year so far with 91 investors participating in RegTech funding rounds. RegTech deal activity increased 9% YoY to 59 deals in H1 2023 while European RegTech companies raised a combined $544m in H1 2023.

The UK was the most active RegTech country in H1 2023 with 20 deals, a 35% share of total transactions. France and the Netherlands were the joint second most active RegTech countries in Europe with six deals each.

Banque des Territores, which offers financing and support solutions, supporting the transformation and modernization of the territories of France, was the joint most active RegTech investor in H1 2023 with four deals. Banque des Territoires has committed capital to companies such as EGERIE is a software house specialized in cyber security analysis, simulation, and management and Sesame IT, which provides security solutions for enterprise networks. Banque des Territoires places itself at the service of the territories – and those who drive them – with the ambition of making them more inclusive, more sustainable, more attractive and more connected and thus to fight against economic and social inequalities. In this capacity, the bank works with local authorities, local public companies, social housing organisations, legal professions and companies and financial players.?

Tikehau Capital, the global alternative asset manager, was the other joint most active RegTech investor in H1 2023 with four deals. Tikehau Capital ahs invested in companies such as Build38 is a provider of mobile application protection solutions for in-app shielding and also in EGERIE. Tikehau Capital commented on their Q1 results, In an environment marked by persistent macro-economic and geopolitical uncertainties, Tikehau Capital continued to deliver solid growth, building on its differentiating approach. As such, the Group saw robust momentum across the three pillars of its Asset Management business: capital deployment was dynamic while remaining highly disciplined, fund performance was robust reflecting portfolio assets’ quality as well as value-creating exits and client demand showed resilience. The diversity and complementarity of Tikehau Capital’s strategies were key strengths allowing the Group to capture client demand across institutional and private investors. In this context, Tikehau Capital reached €38.9bn in Asset Management AuM, up 14% over the last twelve months and representing a compounded annual growth of 27% since 2016.

RegTech news

• Arctic Intelligence, Fintelekt join forces to fortify Asia Pacific’s financial ecosystem - Arctic Intelligence has formed a strategic alliance with Fintelekt Advisory Services, a renowned provider of AML/CTF training and advisory services. Read the full story?here.
• Despite hefty fines, financial institutions still struggle with monitoring unapproved communication channels -?A new survey by Shield and LeapXpert underscores the continued risk financial institutions face from unmonitored communication channels. Only 51% of the financial institutions surveyed are currently monitoring employee communications on WhatsApp, a popular messaging platform. Read the full story?here.
• Eventus on enhancing financial compliance through strong team collaboration - An innovative collaboration approach to financial regulation is being advocated by Eventus, a leading regulatory technology (RegTech) firm, in their latest ‘Compliance in Focus’ series. Read the full story?here.

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Regulation news

• ESMA sets stage for sustainability disclosure in financial prospectuses -?The European Securities and Markets Authority (ESMA) has outlined expectations for sustainability-related disclosures in both equity and non-equity prospectuses. Read the full story?here.
• ?EU and US enhance data protection with new privacy agreement -?The European Union (EU) has recently adopted a new and thorough robust data privacy agreement with the United States. Read the full story?here.
• ESMA initiates first crypto regulation consultation -?The European Securities and Markets Authority (ESMA), the top regulator and supervisor of the European Union’s (EU) financial markets, has issued its inaugural consultation package under the framework of the Markets in Crypto-Assets Regulation. Stakeholders are invited to share their views until 20 September 2023. Read the full story?here.

RegTech Deal news

• Data protection innovator PrivacyHawk raises $2.7m -?PrivacyHawk, the groundbreaking company that empowers individuals to regain control of their personal data, announced it has raised $2.7m in its most recent funding round. Read the full story?here.
• ESG Bay seals ￡135,000 investment to propel green business assessments -?ESG Bay, an environmental, social, and governance (ESG) self-assessment platform, has recently secured a pre-seed investment. The UK-based company assists organisations in gauging their climate and societal impact by applying universal metrics, and generates lucid ESG assessments for customers, community, stakeholders, and the broader public. Read the full story?here.
• Zoom, Theta Lake boost partnership with advanced security-focused integration -?Since 2018, Theta Lake, has formed a strong partnership with Zoom, one of the world's leading video conferencing platforms. Read the full story?here.

CyberTech news

• Exploited loophole causes major $20m security breach for Revolut -?In 2022, Revolut faced a significant security breach, leading to a loss of $20m due to a fault in its payment processing system, as reported by the FT. Read the full story?here.
• SpecterOps extends Series A with $8.5M investment - SpecterOps, a provider of cybersecurity solutions, has closed an extension to its Series A, raising an additional $8.5M from Ballistic Ventures. Read the full story?here.
• Cybersecurity firm SAVVY emerges from stealth with $30m funding -?SAVVY, a cybersecurity enterprise specialising in mitigating workforce-initiated security incidents around SaaS applications, has bagged $30m. Read the full story?here.

Other RegTech news

• Harnessing AI for compliant communication ahead of FCA’s Consumer Duty -?The UK’s Financial Conduct Authority (FCA) recently released a ten-point checklist for companies in anticipation of the new Consumer Duty regulation set to be enforced on July 31, 2023. This regulation marks a pivotal shift in the regulatory landscape, impacting both new and existing services and products available for sale or renewal. Read the full story?here.
• Navigating the AML compliance journey: When is it time to hire an AML Officer? -?Today, the growing complexity of financial operations coupled with an ever-evolving regulatory landscape has magnified the importance of AML compliance in businesses. Especially in FinTech companies, the timing to bring an AML Officer on board is pivotal to the firm’s overall trajectory. RegTech company Flagright has explored when a firm should look to hire an AML officer. Read the full story?here.
• Understanding and mitigating money laundering and terrorism financing risks in your firm -?Australian RegTech firm Arctic Intelligence recently provided a guide to understanding and mitigating money laundering and terrorism financing risks. Read the full story?here.

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