Can RegTech keep pace as regulatory oversight moves beyond finance?
As regulatory oversight expands beyond finance into sectors like healthcare, technology, and supply chains, the complexity and speed of compliance demands are surging. RegTech, leveraging AI and automation, promises to streamline adherence to diverse regulations with precision and efficiency. Yet, as rules evolve and cross-industry boundaries blur, can these solutions scale fast enough to match the pace?
For Supradeep Appikonda, COO and co-founder at 4CRisk.ai, RegTech is no longer a niche solution for finance – it is evolving into a universal compliance compass guiding organisations through a world where regulations are not slowing down but speeding up, diversifying and expanding.
He said, “RegTech is growing rapidly as oversight moves beyond financial services where it has traditionally held its foothold with KYC/AML compliance, fraud prevention and regulatory research solutions that automate regulatory processes, reduce risk and ensure compliance.”
Appikonda emphasised the growth potential of the sector outlined by research, estimated at $19.5 billion by 2026, growing at a CAGR of 20.8% and expected to grow to over $80 billion by 2033.
“RegTech, across all industries, includes the systematic process of collecting, analysing, and disseminating information about regulatory requirements, policies, and guidelines relevant to a specific industry, function or organization. It involves monitoring, interpreting, and predicting changes in the landscape of rules, laws, regulations and standards to ensure compliance and gain a competitive advantage,” stressed Appikonda.
For most industries, he adds, the volume of regulatory changes, with hundreds of updates announced daily, makes a manual approach unsustainable.
To keep pace with changing rules, laws and standards, Appikonda emphasises that horizon scanning and regulatory change management are required.
He continued, “Regulators are reviewing evidence of compliance with more scrutiny, and handing out significant fines to companies like Uber, LinkedIn and Meta, particularly in the areas of privacy and cybersecurity, where gaps have severe consequences in a world of rising risk, breaches and cyber exploits.”
There are some industries that are coming under financial-style regulatory scrutiny, and there are some gaps that are emerging. According to Appikonda, regulatory affairs and compliance monitoring is tailored to specific industries, such as healthcare/pharmaceuticals, telecom, retail, supply chain & trade, energy & climate, and technology & AI, each with its unique regulatory complexities and frameworks.
“Rather than a focus on regulatory affairs, government relations and legal teams, RegTech also serves IT, security/cyber, audit, human resources, compliance, research and development, technology and quality assurance groups,” he said.
An example that has been gaining notoriety this last year is the use of AI in HR, where AI models are used to both generate job requirements but also filter out resumes of legitimate candidates.
“Regulations to address AI bias, worker classification, fair wages and workers’ rights are being adopted. Another example is regulations on the ethical use of new technologies, as organisations race to embed AI in their processes,” Appikonda gave the example.
For Appikonda, RegTech can shift the culture from reactive to proactive compliance by anticipating and understanding the impact of regulatory changes and non-compliance before they become a risk.
He added, “This means products and services can be brought to market faster, especially in regions that require navigating complex regulatory requirements. RegTech analysis can inform business decision-making while mitigating potential regulatory and international standards risks, avoiding breaches, and minimising penalties and reputational damage.”
RegTech leveraging AI can be expanded to support a wider variety of unstructured data—from sensor readings for environmental compliance, to legal documents in PDF format, or policies, procedures and controls within the organisation itself. AI is particularly suited to the analysis of both structured and unstructured data, states Appikonda.
The 4CRisk.ai COO also mentioned that RegTech platforms, particularly those that are SaaS-based, cangrow as an organization expands into more use cases, supporting a cost-effective deployments, scalability and data security. Platforms built with a plug-and-play architecture can integrate with industry-specific source compliance systems.
He also remarked, “Compliance models that cross industries and easily support multi-industry oversight can be found in cybersecurity frameworks like ISO 27001 and NIST’s Cyber Security Framework, privacy regulations like Europe’s General Data Protection Regulation (GDPR) and Health Insurance Portability and Accountability Act (HIPAA), and Canadian federal law like the Privacy Act as well as and manufacturing standards for quality and testing such as ISO9001.
“Many RegTech platforms that serve financial services are easily adapted to support these regulations as specific use cases. For example, in healthcare, with the rapid evolution of patient data privacy in digital health records and AI models supporting telehealth services, regulatory scrutiny is increasing.”
Appikonda concluded by outlining that regulators outside of financial services have long pointed to banking and insurance RegTech as examples of regulatory and compliance monitoring that may be more effective and integrated than in other industries.
He said, “For example, the manufacturing industry has seen more focus on environmental impact, with regulations on carbon emissions, waste management, and sustainable practices being required. In fact, regulators have been critical to the expansion of RegTech into these industries by issuing guidance and establishing standardised data formats that make it easier for organisations to adopt technologies to address their needs.”
Transforming technology
RegTech firm b-next also outlined how regulatory oversight is moving beyond traditional banking and insurance into sectors such as healthcare, energy trading, large tech platforms and publicly-listed firms.
The business remarked, “These industries face financial-style scrutiny, exposing gaps in monitoring, risk detection, and cross-jurisdictional compliance, which many are currently ill-equipped to manage.”
To serve non-financial sectors effectively, RegTech platforms need to be highly modular, data-agnostic and AI-driven.
“This allows them to adapt quickly to diverse regulatory requirements, integrate with existing workflows, and scale across multiple industries without extensive re-engineering,” said the firm.
In addition, b-next stressed that legacy compliance approaches are often rigid and siloed, making them often poorly suited for multi-industry oversight. Despite this, as certain regulations expand such as MAR in Europe, they will be able to cover some of the new compliance needs of non-financial companies and sectors. “Parameterized and adaptive systems, capable of learning from patterns and predicting risk, are critical to bridging this gap,” said the firm.
The role regulators will play in shaping RegTech adoption outside banking and insurance b-next believes will include setting standards for transparency, reporting and automation to encourage a shift towards smarter, tech-enables compliance.
b-next said, “Their guidance will be crucial in shaping how RegTech evolves beyond financial services, ensuring it addresses both sector-specific risks and broader systemic concerns. The result is an opportunity for RegTech to move from a finance-focused toolset to a broader driver of operational resilience and risk management across multiple industries.”
Emerging gaps
Sean Sutton, SME tax specialist at RegTech firm Taina Technology, began by stating that industries such as gig work, healthcare, telecoms, gaming and ecommerce are increasing facing financial-style oversight.
“In the gig economy, for example, platforms must now navigate complex tax reporting obligations, including TIN validation, W9 collection, and 1099 reporting for independent contractors. This shift reflects broader concerns around financial inclusion, fraud prevention, and data governance,” stressed Sutton.
Despite this, gaps are emerging in standardisation, operational effectiveness, and real-time compliance.
Sutton said, “Many non-financial sectors lack the resources to internally manage fragmented and evolving regulatory requirements, especially when operating across jurisdictions. The absence of unified frameworks for identity verification, income tracking, and tax reporting creates inefficiencies and compliance risks.”
How can RegTech platforms scale to serve non-financial sectors effectively? On this point, Sutton explained that to scale effectively, RegTech platforms must, amongst other things, diversify their technology stack with or without AI features, support multiple use cases and ensure modular compliance
Are traditional compliance models flexible enough for multi-industry oversight? Here, Sutton believes that traditional compliance models struggle to adapt to the localised and dynamic nature of non-financial sectors because they are too rigid to focus.
He explained, “Gig platforms, for instance, operate across diverse legal environments and must tailor compliance to local tax codes, labour classifications, and privacy laws.”
The most effective approach for Sutton here is a hybrid compliance model. “It combines global standards (e.g., anti-fraud protocols) with local customization (e.g., state-specific 1099 thresholds), allowing organizations to maintain consistency while responding to regional nuances.”
On the topic of the role regulators play in shaping RegTech adoption outside banking and insurance, regulators are increasingly driving RegTech adoption by deploying advanced tools like AI, robotic process automation, and large language models to enhance oversight. Agencies such as the SEC, FCA, and Dubai Financial Services Authority are using technology to detect misconduct, enforce compliance, and encourage innovation.
Sutton finished by stating, “In non-financial sectors, regulators are expected to set interoperability standards for RegTech tools, encourage sandbox environments for testing compliance solutions, and mandate digital audit trails and real-time reporting capabilities.
“Their proactive stance will shape how gig platforms and other industries adopt RegTech to meet growing demands for transparency, accountability, and consumer protection”
The answer is RegTech
While the finance industry has always been associated with strict compliance, global watchdog FATF has felt the need to broaden its spectrum, given the rise of potential threats within the digital world.
South African RegTech firm RelyComply has seen this in its home market, during its move to get off the regulators greylist where AML protocols are being recommended for a range of now-accountable professions under increased scrutiny – such as high-value goods, casinos and gambling, legal practices and real estate.
These DNFBPs may work in multiple jurisdictions, such as involving transactions across borders and online. For RelyComply, this presents vulnerable blind spots along the supply chain open to exploitation by launderers; a lack of AML culture, expertise and RegTech systems all offer chances for digital-savvy criminals to siphon funds through typical trade-based money laundering techniques or through more complex methods involving cryptocurrencies and decentralised ledgers.
The firm added, “Much like the financial industry faces the problem of ‘joining compliance gaps’ due to regional AML laws, siloed systems, and customer data, the inability of other accountable institutions to spot wrongdoing only compounds the issue. Bad actors identified in the media – or those that are sanctioned or listed as politically exposed persons on trusted watchlists – may be involved in flushing money through specific DNFBPs, and it’s now imperative for any business tied to the financial ecosystem to be responsible for airtight compliance protocols. “
A critical point here is that in both the financial and non-financial sectors, the physical and online world is interconnected. As businesses may work as customers as third-party vendors, for these close relationships to work safely, no part is able to falter.
“But RegTech adoption remains an answer for all manner of sectors: offering cost-effective and integrated ways to conduct KYC, enhance due diligence, and maintain real-time flexibility to any bespoke risks that may affect them–even when they inevitably change. RegTech platforms act as helpful cross-industry specialists attuned to various compliance challenges depending on company size, digital maturity, payment types, and typologies,” stressed RelyComply.
Through providing continuous access to fast-paced watchlist changes and alerting to suspicious activity immediately, RelyComply emphasised they’re the bridge connecting accountable firms with regulators and relevant authorities.
“Together, they contribute to ensuring evolving crime is not only spotted but punished in a timely manner, keeping safe, legitimate business flowing,” said the company.
Expanding oversight
Oversight is expanding into sectors that did not grow up with bank-grade controls, a point stressed by CEO of Flagright Baran Ozkan.
He remarked, “In the EU alone, new AML rules add parts of the crypto sector, luxury goods, gambling, and even professional football clubs to the list of “obliged entities,” alongside stricter cash limits and stronger FIU coordination under the new AML Authority in Frankfurt. Beyond finance, platforms face DSA‑style transparency and risk‑management duties that look a lot like conduct supervision, which is pushing marketplace, social, and retail ecosystems to adopt compliance tooling once seen only in banks.”
For Ozkan, RegTech can scale into these industries by separating ‘control logic’ from sector specifics. In practice, this means a common obligation model and adapters for sector data, he claims, whether this is wallet addresses, ticket transfers, or marketplace merchant IDs.
“At Flagright, we build to a single event stream and control library, then switch on sector modules so a football club, a marketplace, and a payments firm can all prove the same core controls with different data sources. The bottleneck is legacy playbooks that assume one industry and one rulebook; platforms that move to API‑first controls and real‑time evidence will adjust faster as rules widen,” he finished.
Adapt or perish
IMTF co-CEO Sebastian Hetzler believes that we’re seeing financial-style regulatory scrutiny move way beyond banking, from real estate and gaming to crypto, international trade and corporates.
“Many of these players lack mature compliance infrastructure, which creates real gaps. RegTech solutions can help them keep pace, but only if platforms are built to be scalable, modular, and adaptable across industries.
“Traditional models are too rigid — what’s needed is a hybrid approach combining AI with human expertise. Regulators will play a key role in shaping adoption, and those who act early will be best prepared for the next wave of oversight.”
As regulatory scrutiny expands to corporate and non-financial sectors, Hetzler believes that only scalable and adaptable RegTech – linking AI with human expertise – will be able to keep pace with the next wave or oversight.
Keep up with all the latest RegTech news here
