By Stephen Rae for AMLi
SPENDING on RegTech – in areas like onboarding and KYC – will surge over the next five years by 290% to $130BN, a new survey predicts.
The huge growth in spending will primarily be be driven by the greater use of AI, the report finds.
The report from Juniper Research says almost 18% of banking digital onboarding in 2025 globally will utilise AI – compared to 4% last year.
The authors says AI will be used to automate highly manual tasks and the transition to digital onboarding, which emerged as critical capabilities in the wake of the pandemic.
“Digital onboarding has been accelerated by lockdown measures, but ultimately, it is an acceleration of existing trends towards greater digital engagement,” says author Nick Maynard.
“Businesses should rebuild their KYC and onboarding processes from the ground up to take advantage of these new capabilities, or they will lose ground to digitally native competitors,” said Maynard.
While institutions are urged make AI a core part of their solutions, it is critical to leverage human intelligence to ensure decisions remain fully explainable.
By leveraging AI capabilities to automate manual tasks will enable businesses to improve spending levels of regulatory compliance.
The report, Regtech: Market Opportunities, Challenges & Forecasts 2021-2025, predicts nearly 330 million new bank accounts will be opened via digital onboarding in 2025 – up from 184m in last year.
Ultimately, spending on RegTech will jump from $33BN last year to $130BN in 2025.
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