What trends will drive RegTech in 2025? & UK dominated European RegTech in 2024

Will AI continue to be the dominant RegTech trend in 2025?

Entering 2025, the RegTech sector is looking ahead to new challenges and opportunities that will drive its continued growth in the new year. With strong growth predicted for RegTech firms going forward, what could be some of the key trends that stand out in the market this year?

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Research highlight

UK companies dominated the European RegTech market with six of the top 10 deals in 2024

Key European RegTech investment stats in 2024:

• European RegTech deal activity halved in 2024 YoY
• UK dominated the European RegTech space completing six of the top 10 deals
• Napier AI, a London-based RegTech specialising in AI-powered financial crime and compliance solutions, secured $56.9m funding from Crestline Investors, making it one of the largest European RegTech deal for the year

European RegTech deal activity halved in 2024 YoY

In 2024, the European RegTech sector recorded 111 deals, a sharp 53.9% decline from the 241 deals completed in 2020 and a 49.5% drop from the 220 deals recorded in 2023.

Total funding in 2024 amounted to $724m, marking a 33.8% decrease from the $1.1bn raised in 2020 and a significant 52.9% decline from the $1.5bn raised in 2023.

This contraction in both deal activity and funding highlights a challenging landscape for the European RegTech market, driven by economic uncertainty and cautious investment behaviour. ?

UK dominated the European RegTech space completing six of the top 10 deals

The distribution of top 10 deals in 2024 indicates a noticeable shift in regional influence.

The UK strengthened its leadership, securing six of the top 10 deals, a marked increase from just two deals in 2023.

France, which led with three deals in 2023, secured only one in 2024, signalling a reduction in its dominance.

New entrants, such as Denmark and Sweden, made their way into the top 10 in 2024, replacing The Netherlands, Lithuania, and the Czech Republic, which were prominent in 2023.

Germany maintained a consistent presence across both years, reflecting steady activity in the sector.

This evolution suggests a consolidation of influence in the UK, accompanied by diversification in emerging European markets.

Napier AI, a London-based RegTech specialising in AI-powered financial crime and compliance solutions, secured $56.9m funding from Crestline Investors, making it one of the largest European RegTech deal for the year

Known for its advanced anti-money laundering (AML) and know-your-customer (KYC) software, Napier AI's platform, Napier Continuum, is trusted by over 150 institutions globally, transforming regulatory compliance into a strategic advantage.

This new funding will accelerate Napier AI's growth, allowing the company to expand its innovative solutions in the financial sector and further its mission of driving down financial crime through cutting-edge technology.

RegTech news

• Is 2025 going to be another transformative year for RegTech? - 2024 was another strong year of growth for the RegTech sector, with the industry gathering more eyes on the space than ever before. With strong growth predicted going forward, 2025 could be yet another red-letter year for the fledging market. Read the full story here.
• Why Encompass is betting on CDI as a change agent for onboarding - Founded in 2011, London-headquartered Encompass enables fast, accurate identity validation and verification of corporate customers, and a gold standard approach to Know Your Customer (KYC). Now in its second decade, how are the firm’s mission and goals evolving? Read the full story here.
• Understanding the 3 stages of money laundering: How AML integration protects businesses - Money laundering is a global issue, undermining economies and enabling illicit activities by disguising illegal funds as legitimate. This pervasive challenge affects financial institutions and high-risk industries, making Anti-Money Laundering (AML) measures essential to combat it effectively. Read the full story here.

Regulation news

• EBA’s new ESG guidelines promise a greener future for finance - The EBA has issued comprehensive guidelines aimed at enhancing the management of ESG risks within the financial industry. Read the full story here.
• SEC imposes $45m penalty on Robinhood for extensive securities violation - Robinhood has agreed to a substantial $45m settlement with the SEC over various breaches of securities law. Read the full story here.
• CFPB calls for public input on privacy in digital payments - The CFPB has launched a significant initiative seeking public feedback on enhancing privacy measures and safeguarding consumers from undue surveillance within digital payment platforms. Read the full story here.

RegTech Deal news

• Salv launches new Bridge cohort to combat rising APP fraud in FinTech - European RegTech scale-up Salv is set to revolutionize fraud prevention with the latest iteration of its Salv Bridge network. Read the full story here.
• Quantifind secures $22m funding to expand AI compliance solutions - Quantifind, a leader in AI-powered financial crime intelligence, has announced it raised $22m in its latest funding round. Read the full story here.
• Archive Intel raises $1.5m to expand AI-driven compliance solutions - Archive Intel, a leader in AI-powered compliance archiving solutions, has secured an additional $1.5m in funding to accelerate its growth. Read the full story here.

CyberTech news

• Orchid Security secures $36m to transform identity security with AI - Orchid Security, a leader in identity-first security orchestration, today announced it has raised $36m in seed funding. Read the full story here.
• Chainalysis expands anti-fraud capabilities with acquisition of Alterya - Chainalysis has officially acquired Alterya, an AI-powered fraud detection platform renowned for its preemptive scam identification capabilities.?Read the full story here.
• Czech cybersecurity startup Wultra raises €3m to combat quantum threats - Czech cybersecurity firm Wultra, known for its advanced post-quantum authentication solutions, has raised €3m in a Seed+ funding round. Read the full story here.

Other RegTech news

• How AI is transforming AML and FCC operations in financial services - For years, the Financial Crime Compliance (FCC) sector has been grappling with persistent challenges that have remained largely unchanged over the past two decades. Read the full story here.
• What are the biggest challenges facing ESG reporting? - As environmental, social and governance (ESG) continues to become more prominent in regulations, firms will need to ensure they have the capability to effectively and efficiently complete ESG reporting processes. Read the full story here.
• Financial crime in 2025: The crucial role of AI and industry collaboration - As RegTech closed another year marked by significant advancements and shifts in the financial crime landscape, it is proving key for the sector? to look back at 2024 to forecast the potential challenges and innovations that 2025 may hold. Read the full story here.