The rise of Donald Trump, Brexit, and the global movement toward right-wing populism have ushered in a new era of deregulation, or at least, that’s the prevailing narrative. The reality is more nuanced: deregulation doesn’t mean no regulation; it means different regulation. And that shift presents a once-in-a-generation opportunity for Regulatory Technology (RegTech).

RegTech has been one of the fastest-growing segments of fintech, originally propelled by the post-2008 crackdown on financial misconduct. Since 2020, the combination of heightened regulatory scrutiny, pandemic-induced disruptions, and the digitization of financial services has further accelerated adoption. Today, financial institutions are spending over $200 million annually on compliance, but non-compliance costs even more, evidenced by multi-billion-dollar fines for anti-money laundering (AML) lapses, data breaches, and ESG violations.

But here’s the twist: the new wave of right-leaning governments isn’t dismantling regulation, it’s redefining it. Anti-globalist sentiment is leading to fragmented compliance standards. Nationalist policies are increasing trade barriers and data localization laws. ESG regulations, once a hallmark of progressive politics, are now being weaponized in unexpected ways. The world isn’t moving toward a regulatory free-for-all; it’s becoming a patchwork of conflicting rules that financial institutions and corporations must navigate in real-time.

This is why RegTech isn’t just resilient, it’s mission critical. Unlike the broader fintech sector, which saw volatility in investment cycles, RegTech was the only fintech subsector to increase funding in 2022, jumping to $18.6 billion from $11.8 billion in 2021. Compliance isn’t optional and, as regulations shift, the demand for technology-driven solutions is only growing. The next frontier? RegTech is evolving to address new challenges and opportunities emerging from AI advancements and shifting monetary policies. With the global adoption of blockchain transforming B2B transactions, international payments, and distributed ledgers (on-chain recordkeeping), alongside the widespread implementation of AI across enterprises, new sectors in regulation have emerged. AI agents, non-human identities, and ethical AI considerations have opened a metaphorical Pandora’s box, necessitating new RegTech solutions. From AML and KYC/KYB to ESG compliance and data security, these technologies demand not only the conventional regulatory frameworks but also enhanced oversight to navigate the complexities of this new digital landscape.

As we move through 2025 and beyond, regulators themselves are arming up with AI, increasing enforcement capabilities, and leveraging technology to detect non-compliance faster than ever.  This article explores the RegTech landscape at a high level, highlighting key startups as well as the emerging opportunities that lie at the intersection of regulation, politics, and technology.

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