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Covid-19 Catalysing the Rapid Growth of Asia Pacific Regtech Sector

Regtech in Asia Pacific (APAC) faces the difficult challenge of bridging the divide between developed and developing economies in the region, according to a report released today by the Irish government’s trade and innovation agency Enterprise Ireland. The divide was particularly highlighted as the effects of Covid-19 accelerated the demand for the adoption of regtech solutions in the region.

The report, entitled The State of Regtech in APAC, provides the most comprehensive, independent analysis available on the adoption of regtech across 10 key APAC markets of Australia, Mainland China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Enterprise Ireland commissioned Kapronasia, an Asian financial technology market research and consulting firm, to develop the report which identifies the latest opportunities and roadblocks facing regtech players in each of these markets.

Launching the report today, Ireland’s Minister of State for Financial Services Sean Fleming said: “I welcome this comprehensive regtech report from Enterprise Ireland. It captures the essence of what the Ireland for Finance Strategy is looking to achieve and the unique value proposition that Ireland offers to firms in Asia Pacific and across the globe. As Minister with responsibility for International Financial Services, I want to consolidate and accelerate our position as one of the world’s leading locations for fintech and regtech development. I look forward to working with the Enterprise Ireland firms and their partners in Asia as together they deliver value and bring innovative responses to global compliance challenges.”

It has been forecasted that the global regtech market will grow from $6.3 billion in 2020 to $16.0 billion by 2025, a rate of over 20% per year, with APAC expected to have the highest growth rate over this period. The projected growth of the sector is in tandem with the booming fintech scene in the region, particularly in Southeast Asia which saw an estimated $1 billion worth of investments in 2019.

While APAC is home to some of the world’s major financial centres, the non-homogenous region demonstrates varying levels of market development. In developed economies such as Hong Kong, Singapore, Sydney and Tokyo, regtech uptake is driven by a sophisticated financial ecosystem and a complex regulatory environment. The need for governance and accountability, the emergence of new market participants and security concerns arising from disruptive technologies such as artificial intelligence and distributed ledger technology give regulatory impetus for regtech adoption.

This contrasts with developing economies where regtech uptake is driven by the sector’s promise in helping to create financial inclusion. Uptake is also reliant on business cases and under-resourced regulators in these markets. With that said, market interest for regtech solutions in these economies is not as strong as their developed counterparts. This can be attributed to regulatory inertia and a marked difference in fundamental behaviours and attitudes towards regtech.

Developing economies however stand to mature over time – while technology ecosystems in developed and developing economies will continue to evolve at an increasingly varying pace, given differing regulatory drivers for regtech adoption. This is especially evident in the wake of the Covid-19 pandemic that has further reinforced differing domestic priorities and exacerbated the economic and technology gap in APAC.

“Covid-19 compelled financial services sector to see the value of digitalisation as a necessity. It has become a way for organisations to improve their services in response to changing business and consumer needs. The need for regtech solutions also expands far beyond the financial services sector which is why this sector is growing so rapidly. This report is a compendium for anyone in the regulatory, risk or compliance functions of any company in the region, as well as for regtech companies which are looking to scale and expand into Asia Pacific,” explained Mo Harvey, Enterprise Ireland’s Financial Services and Fintech Lead (Asia Pacific).

“Asia Pacific continues to be a strategic region, not only to Ireland which is home to many regtech specialist companies but to the world. At Enterprise Ireland, we share the commitment to support the development of a vibrant global regtech segment and contribute to the global regtech ecosystem, and we hope that this report will provide valuable insights into the complexity of the sector as we continue to prime many companies for success and long-term growth in the region,” she added.

Brian Tang, co-chair of the Fintech Association of Hong Kong’s Regtech Committee and co-convener of the APAC RegTech Network that brings together the Regtech committees of the fintech associations of Hong Kong, Singapore, Japan and Malaysia said, “Regtech is a secret sauce that empowers financial institutions, fintechs, virtual asset service providers and beyond. All such institutions, and their regulators and users, across the Asia-Pacific benefit from innovative, efficient and cost-effective regtech solutions to combat financial crime and drive efficiencies and financial inclusion, regardless of origin of such technology solutions.”

“However, the journey to adoption is certainly not a straightforward one. We congratulate Enterprise Ireland for making this comprehensive report on the state of Regtech in APAC publicly available so that Regtech solution providers from across the globe, as well as APAC policymakers, can benefit from its findings to help drive further regtech adoption in the region,” he added.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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