Artificial intelligence has quietly become a baseline expectation inside the compliance functions of the world’s leading FinTech firms — and the implications for the RegTech market are significant.
According to Areg Nzsdejan, CEO of Cardamon, he detailed in a recent LinkedIn post how in a recent conversation with a governance, risk and compliance (GRC) leader at one of the most highly valued FinTechs globally, a clear picture emerged of how the modern compliance stack is being rethought from the ground up. The message was unambiguous: using AI to drive efficiency is no longer a differentiator. It is now standard practice, and for compliance teams operating at scale, it is actively expected.
But the more consequential shift is not about individual AI tools. It is about how organisations are approaching their entire technology stack. Rather than making isolated, point-by-point upgrades, leading compliance teams are reassessing every layer of their infrastructure simultaneously. A best-in-class solution that cannot integrate with existing AI workflows, or that fails to communicate with adjacent systems, is effectively rendered useless — regardless of how sophisticated it may be in isolation.
What does this mean for vendors? According to the GRC leader, none of their current providers meet the bar in their present form. That is a pointed assessment, though it comes with an important caveat: the intention is not to build everything in-house. There is a clear appetite for external solutions — but they must be the right kind.
The priorities that emerged from the conversation are telling. High-quality regulatory data is considered non-negotiable; as the principle goes, poor inputs produce poor outputs. Equally important are auditability, the ability to scale across large user bases, consistency of output, and workflows that genuinely support how compliance officers operate day-to-day.
The implication for the market is stark. Rigid, prescriptive solutions — those that compel users to adopt a particular interface, taxonomy, or methodology — face a growing threat. As compliance teams increasingly build AI-native workflows tailored to their own organisations, inflexibility becomes a liability rather than a feature.
By contrast, solutions that offer scaffolding and structural support for custom builds are well positioned to become critical infrastructure. Companies such as Cardamon, a Y Combinator Winter 2025 cohort member, represent the kind of flexible, foundational approach that could define the next generation of RegTech.
The compliance stack is being rebuilt. The vendors who survive — and thrive — will be those who enable that process rather than obstruct it.
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