November 21, 2025
The global financial sector faces increasingly complex regulatory challenges, driven by constantly evolving standards and the need to ensure compliance across multiple jurisdictions. In this scenario, Regulatory Technology, or RegTech, emerges as a solution to automate and optimize compliance processes, offering agility, security, and scalability to financial institutions.
What is RegTech and how did it come about?
The term "RegTech" is a combination of "regulatory" and "technology". It refers to the use of emerging technologies, such as artificial intelligence (AI), machine learning (ML), blockchain, and big data, to help companies meet regulatory requirements more efficiently and effectively. The concept gained prominence after the 2008 financial crisis, when demands for greater transparency and control in the financial sector increased.
Informational content. Does not constitute an offer of securities, foreign exchange services, or payment services. Past performance does not guarantee future results. Azify acts directly or through duly authorized partners, according to the scope.
What are the main technologies applied to financial compliance?
RegTech solutions use various technologies to enhance compliance processes:
Artificial Intelligence and Machine Learning: Analyze large volumes of data to identify patterns and detect suspicious behaviors, such as fraud and money laundering.
Blockchain: Provides immutable and transparent records, facilitating audits and ensuring the integrity of information.
Big Data and Predictive Analytics: Enable the processing and analysis of large amounts of data in real-time, assisting in informed decision-making.
Process Automation: Reduces the need for manual intervention, increasing efficiency and decreasing human error.
What is the impact of RegTech on fintechs and digital banks?
RegTech has been fundamental for the growth and operation of fintechs and digital banks, especially in a dynamic regulatory environment. These solutions allow these institutions:
Scalability: rapidly adapt to new regulations and expand their operations into different markets.
Cost reduction: automate manual processes, decreasing operational expenses and associated risks of errors.
Continuous compliance: ensure adherence to standards in real time, avoiding penalties and damage to reputation.
Agile innovation: develop and implement new products and services more quickly, meeting consumer demands.
Usage examples: transaction monitoring, KYC, and fraud prevention
As RegTech applications are vast and directly impact the operation of financial institutions:
Transaction monitoring: Solutions that analyze transactions in real-time to identify suspicious activities and prevent fraud.
KYC (Know Your Customer): Automate the identity verification process of customers, ensuring compliance with anti-money laundering regulations.
Fraud prevention: Use algorithms to detect patterns of fraudulent behavior and alert institutions for immediate corrective actions.
What are the benefits of RegTech solutions?
The adoption of RegTech solutions offers various benefits to financial institutions:
Scalability: ability to expand operations into new markets and quickly adapt to regulatory changes.
Security: strengthening defenses against fraud and cyberattacks, protecting sensitive data.
Cost reduction: decrease in operational expenses through automation and efficiency in compliance processes.
Continuous compliance: assurance of adherence to regulations in real-time, avoiding fines and damage to reputation.
What are the challenges and limitations?
Despite the benefits, the implementation of RegTech solutions faces some challenges:
Integration with legacy systems: difficulty in integrating new technologies with existing infrastructures.
Initial cost: high initial investments for the adoption of advanced technologies.
Regulatory complexity: necessity to adapt solutions to the various regulations of different jurisdictions.
Data privacy: ensuring the protection of sensitive data in compliance with privacy laws.
RegTech market trends in Brazil and around the world
The Regulatory Technology (RegTech) market is undergoing a significant transformation, driven by increasing regulatory complexity, technological advancements, and the need for more efficient and secure compliance solutions. Let's explore the main trends shaping this scenario.
The global RegTech market is rapidly expanding. In 2024, it was valued at US$ 15.8 billion and is projected to reach US$ 82.77 billion by 2032, with a compound annual growth rate (CAGR) of 22.8%. This growth is driven by the increasing demand for solutions that seamlessly integrate compliance, security, and technological innovation in an efficient and scalable manner.
In Brazil, the scenario is equally promising. The adoption of RegTech solutions has gained momentum, driven by the need for compliance with local and international regulations. In 2024, the RegTech market in Latin America was estimated at US$ 270.36 million, with an annual growth rate of 35.3%. Projections indicate that this value could reach US$ 732.95 million by 2029, with a CAGR of 22.1% during that period.
Although the financial sector still concentrates the majority of RegTech solutions, there is a growing adoption in other sectors. Data from 2024 shows that more than 38% of Brazilian RegTechs already serve companies outside of the banking sector, with a growing focus on areas such as healthcare, retail, construction, agribusiness, and industry. Within these areas, medium-sized companies are leading the adoption curve, seeking operational efficiency and enhanced regulatory control.
The Brazilian regulatory environment has proven favorable to innovation. In 2024, the Central Bank of Brazil published the Normative Instruction No. 511, establishing guidelines for processes related to payment arrangements. This regulation aims to standardize and regulate procedures, promoting greater security and efficiency in financial operations.
Furthermore, the Central Bank has accelerated the implementation of artificial intelligence in its business processes, highlighting the importance of technology in enhancing the efficiency and effectiveness of the institution's operations.
Informative content. It does not constitute an offer of securities, foreign exchange services or payment. Past performance does not guarantee future results. Azify operates directly or through duly authorized partners, as per the scope.
How is RegTech being applied to ensure safe innovation?
The use of Regulatory Technology (RegTech) has significantly expanded in the financial sector, especially in critical areas such as KYC (Know Your Customer), transaction monitoring, and fraud prevention. These technologies are enabling financial institutions to automate compliance processes, meet regulatory requirements, and improve operational efficiency.
Main applications of RegTech
KYC and KYB (Know Your Business): RegTech solutions are facilitating customer and business identity verification and due diligence, aligning with local and international regulations. In Brazil, for example, Circular No. 3,978/2020 from the Central Bank requires financial institutions to conduct identity verification of clients and ultimate beneficiaries, as well as maintain updated records.
Transaction monitoring: RegTech tools are being used to detect suspicious activities in real-time, helping in the prevention of financial crimes.
Fraud prevention: systems based on artificial intelligence are being implemented to identify fraudulent behavior patterns, reducing financial losses. In Brazil, the financial sector recorded losses of R$ 10.1 billion related to fraud in 2024.
The adoption of RegTech solutions offers several benefits for financial institutions:
Operational efficiency: the automation of processes reduces the need for manual intervention, accelerating operations and decreasing errors.
Regulatory compliance: RegTech tools help companies meet regulatory requirements more effectively, avoiding penalties and damage to reputation.
Enhanced security: analyzing large volumes of data in real-time allows for early detection of suspicious activities, strengthening the security of transactions.
Despite the benefits, the implementation of RegTech solutions also presents challenges:
Integration with legacy systems: adapting modern technologies to existing infrastructures may require significant investment and time.
Privacy and data protection: handling sensitive information requires compliance with data protection laws, such as the LGPD in Brazil.
Initial cost: adopting advanced technologies can represent a high initial cost, which can be a barrier for some institutions.
